You can build incredible wealth in the stock market, and it's not as difficult as you think. The key is to be patient and own shares of a growth company that still has a large market to expand. Here are two stocks with huge return potential.
dutch brothers (NYSE: BROTHERS) is a rapidly growing beverage chain that is building a unique brand. About half of its menu is coffee drinks, but it's different from the others Starbucks There's also a range of other drinks on the menu, including lemonades, smoothies and sparkling sodas.
The company was founded in 1992 by brothers Dane and Travis Boersma and went public in 2021. After underperforming over the past few years, the stock has stabilized within a more reasonable valuation range, with attractive return prospects as the company continues to expand across the U.S.
Third-quarter revenue increased 28% year-over-year. It already covers 950 locations in 18 states, leaving plenty of room for further growth. Same-store sales, which measures growth at existing stores open at least 15 months, rose 2.7% year over year, consistent with single-digit gains over the past few years.
Additionally, the Dutch brothers remain disciplined when opening new stores without being too aggressive. The company is experiencing profitable expansion, with net income of $22 million in each of the last two quarters.
Investing in profitable and growing restaurants when they're smaller is a great way to build wealth in the stock market, and Dutch Brothers is clearly a very promising opportunity. With 32 states yet to open a Dutch Bros store, plenty of growth over the next 20 years could drive huge returns.
Cupang (NYSE: CPNG) is Korea's leading e-commerce store. it is usually described as Amazon South Korea, but the company is establishing a unique niche in the densely populated region that could give it an advantage as it expands. The stock is up 30% last year.
Coupang has 22.5 million active customers who placed at least one order in the last quarter. Active customers grew 11% year-over-year in the third quarter, which, coupled with increased spending by existing customers, drove double-digit revenue growth.
A key advantage of Coupang is its fulfillment infrastructure, which management says can deliver 99% of orders within a day.
It's not easy: Seoul, South Korea, has more than 15,000 people per square kilometer. But with Coupang's Dawn delivery service, customers living in large apartment buildings can place an order before midnight and have it delivered by 7 a.m. the next morning. Being able to provide fast delivery services to thousands of customers in densely populated areas can be an advantage for Coupang when it expands to other regions.
The company has found it challenging to compete with Amazon in the U.S., but it has been successful in Taiwan and in other markets around the world where its delivery system adds value to consumers.
However, most of Coupang's growth is still driven by existing customers in South Korea, and management still sees potential for sales growth from its existing customer base as it expands its selection.
For a company whose revenue grew 27% year over year in its most recent quarter, the stock could be a lucrative investment. The stock trades at a reasonable 1.4x trailing sales, which could support strong returns as the company continues to grow.
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John Mackey is the former CEO of Amazon subsidiary Whole Foods Market and a board member of The Motley Fool. John Ballard works for Coupang and Dutch Bros. The Motley Fool is staffed and recommended by Amazon and Starbucks. The Motley Fool recommends Coupang and Dutch Bros. The Motley Fool has a disclosure policy.
2 Skyrocketing Stocks Worth Buying in January and Holding for 20 Years Originally published by The Motley Fool