3 Hot Stocks to Hold for the Next 20 Years

It can be difficult to buy a stock when its price is skyrocketing. The higher the stock price goes, the more money you have to pay to own a piece of the company. But there’s usually a good reason why the stock price is steadily rising, and it’s usually related to the company’s fundamentals.

Legendary investor Warren Buffett famously said that “if a company does well, the stock will eventually follow.” There is a subtlety to this simple statement in that it really means that you should be interested in the company behind the stock, because it is the company’s success that will drive its stock price up.

Once you understand this subtlety, you will have a clear idea of ​​how to invest if you want to succeed in building your wealth. You must focus on solid assets. growth values These stocks represent companies that have catalysts or have been following sustainable trends for years or even decades and can grow their revenue, earnings, and cash flow over time. As companies’ earnings grow, investors bid up the price of their shares, resulting in attractive capital gains. As these stocks’ gains compound, you’ll eventually end up with a comfortable amount of money that you can draw on for retirement.

Here are three stocks that have skyrocketed this year and are still worth buying now for long-term gains.

Image source: Getty Images.

1. The Dutch Brothers

Dutch Brothers (NYSE: BROS) Dutch Bros is an operator and franchisor of drive-in coffee shops that serve high-quality craft beverages. As of March 31, the company had 876 locations in 17 states across the United States. Dutch Bros’ stock price is up nearly 333% year-to-date, and with a market cap of just $6.5 billion, there is plenty of room for further growth.

The coffee chain’s finances have seen a marked improvement over the past three years. Revenue jumped 92% from $497.9 million to $965.8 million from 2021. The company reported an operating income of $46.2 million for 2023, a far cry from the operating loss of $111.2 million in 2021. Even after deducting finance costs of $32.3 million in 2023, Dutch Bros still posted a small net income of $1.7 million, a turnaround from two consecutive years of net losses in 2021 and 2022.

Operating cash flow also increased to $139.9 million for 2023, more than double the prior year, but free cash flow remains elusive for now as the coffee chain spends available capital to open new stores.

Dutch Bros. experienced rapid store growth over the three years. The store count started at 441 in early 2021 but nearly doubled to 831 by the end of 2023. Systemwide comparable store sales were also positive in all three years. This momentum continued in the first quarter of 2024, with a total of 45 new stores opened in 14 states.

First-quarter revenue increased 39% year-over-year to $275 million, with operating income of $25.6 million. Net income for the quarter was $7.1 million, already more than the total net income for the full year 2023.

Read Complete News ➤

Leave a Reply

Your email address will not be published. Required fields are marked *

sixteen + 17 =