2 monster stocks to hold for the next 20 years

Finding emerging consumer brands while they are relatively unknown can be a very rewarding investment strategy. The stock market presents these opportunities to investors all the time. You just need to pay attention to the brands that people buy more often.

Here are two fast-growing brands that could make investors a small fortune over the next 20 years.

1. Cava Group

Investors who jumped on board Chipotle Mexican Grill, McDonald’sor Starbucks in the early years of growth today I sit on the cat seat. Cava Group (COFFEE 2.86%) is the latest high-flying restaurant stock worth betting on for the long term.

There are plenty of burger, steak, pizza, Italian, Chinese, and Mexican chain restaurants, but there aren’t many establishments in the US with a Mediterranean-focused menu. The cuisine is seen as a healthy and sophisticated alternative in a sea of ​​same old options. That’s why Cava has seen impressive customer traffic this year in a challenging consumer spending environment that has driven double-digit same-store sales growth.

Strong growth has sent the stock up 185% over the past year, but it’s not too late to buy. Cava’s 35% year-over-year revenue growth is on par with Chipotle’s growth in its first years as a public company. A $10,000 investment in Chipotle in 2006 would have grown to $634,000 today, and Cava is following a similar growth path.

Cava has a huge growth track. Its quarterly revenue of $231 million is a fraction of Chipotle’s $2.9 billion. It took Chipotle nearly two decades to expand to its current size. Cava is currently in 25 US states and just opened in Chicago with the strongest customer response the company has seen to date.

Importantly, Cava is growing its store base at a rate of about 8% to 9% per year, but management is expanding in a disciplined manner. It posted a net profit of $19 million in the last quarter. The company will become more profitable as it expands in the US, and that should support more new highs for Cava stock.

2. Waiting

The athletic apparel industry has been another ripe market for monster stock market winners. A $10,000 investment in NIKE The 44-year-old would now be worth $7.7 million with reinvested dividends. Investors may have a second risk to earnings like this because On Holding (ONON 0.13%) it is currently growing at a rate similar to that of Nike in the 1980s.

On is one of the most popular clothing brands right now. There were 66 athletes sponsored by On at the Olympic Games in Paris this year. Like Nike, On generates the majority of its sales from performance shoes, a segment that grew 28% year-over-year on a constant currency basis last quarter.

On is seeing strong growth across all the styles of running shoes it offers, but management noted that its comfortable Cloudtilt shoe is flying off the shelves. The brand has just launched its new Cloudsurfer Next shoe at a relatively low price, which management expects to expand its addressable market.

The popularity of On shoes, especially among athletes, shows the brand’s potential to benefit from partnerships. It’s similar to how Nike built their brand. It has already seen a significant increase in brand awareness as a result of a partnership with actress and singer Zendaya, who has a massive following on social media.

Nike didn’t have the advantage of social media 40 years ago, so On could see his brand grow faster than Nike. On that note, analysts expect the company to grow earnings at an annual rate of 34% over the next few years, which should support excellent returns for investors.