A bull market is underway S&P500 Some companies are well-positioned to see improved revenue and profits in the coming years, potentially sending their stock prices soaring.Here's a huge reason for entertainment Walt Disney (NYSE:DIS) fast-growing restaurant chain dutch brothers (New York Stock Exchange: Brothers) It's a great purchase.
Walt Disney
For Disney, the transition to becoming a digital-first entertainment company hasn't been easy. Investing in streaming content has dented its bottom line, while the company's legacy media networks (like ABC and ESPN) are slow-growth assets that have struggled to maintain steady revenue in a sluggish advertising market.
However, Disney announced the hiring in November pepsicoHugh Johnston, Chief Financial Officer, has been appointed Senior Vice President and CFO. Mr. Johnston has done an excellent job guiding PepsiCo's financial decisions over the past decade, contributing to the snack food giant's profitable growth and returns to shareholders. It's an important hire for Disney as investors call for greater financial discipline at the company to reverse recent stock declines.
Disney was already moving in the right direction. Losses in direct-to-consumer businesses (such as Disney+ and Hulu) have narrowed significantly in recent quarters due to subscriber growth and price increases. As a result, management believes the company is on track to return to profitability by September of this year.
As for the rest of the business, management said Disney's parks and experiences are thriving and generating higher revenues and profits than four years ago, while media networks have a significant opportunity to improve margins. .
Mr. Johnston should help lead Disney to a decade of profitable growth. The stock hit a low of $78 last year, but has already recovered to $97. This is still a significant discount compared to the price Disney was trading at a few years ago, and could understate the future value of this beloved entertainment brand.
dutch brothers
When a new bull market is underway, looking for small, fast-growing restaurant chains that can thrive in a growing economy can pay big dividends.Just ask our early investors. Chipotle Mexican Grill. If he invested $1,000 in Chipotle stock at the bottom of the 2008 bear market, he would be worth $38,000 today. There's a good reason why Dutch Brothers has the right formula to deliver similar returns to investors.
Dutch Bros.' stock price has been weighed down recently by volatile same-store sales, but the company's unique menu of flavorful sodas and coffees has resonated in every market it's been in.
By the end of the third quarter, Dutch Bros. participated in just 16 states. These stores are generating a high contribution margin of 31%, up from 25.6% in Q3 2022, which is unusual.
One of the key factors that makes Dutch Brothers a successful growth story is its focus on opening company-owned stores. The company has promoted veteran Dutch Bros. “Brownsta'' to lead each new store opening, which could drive consistent store-level performance.
Growth investors looking for stocks with the potential to skyrocket over the next 10 years, look no further. Dutch Brothers has consistently reported year-over-year revenue growth of over 30%, profits are starting to follow suit, and the stock price is trending higher as the company expands into more states.
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John Ballard has no position in any stocks mentioned. The Motley Fool recommends Chipotle, where he holds positions in Mexican Grill and Walt's Disney. The Motley Fool has a disclosure policy.
“The Bull Market Is Coming: 2 Top Stocks to Buy Hand Over Fist” was originally published by The Motley Fool
