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You can multiply your savings in the stock market, and it's not difficult to achieve. The easiest path to success is to maintain a long-term perspective on businesses and only invest in the ones that are regularly reporting strong revenue growth. As long as the business is growing, the stock may bounce around in the near term, but it's almost certainly going to increase in value over time.
To help you in your search, here are two outstanding growth stocks that have enormous return potential in the $1 trillion restaurant industry.
1. Dutch Bros
Wall Street is finally waking up to one of the best growth stories in the restaurant industry. Shares of Dutch Bros (NYSE: BROS) doubled over the past year. The Oregon-based beverage chain has grown to 982 locations across 18 states, with revenue growing more than 30% year over year and outperforming industry leader Starbucks.
The company's same-store sales, which measures performance at stores open 15 months or longer, have been impressive during a challenging consumer spending environment. It reported a same-store sales increase of 5.3% for 2024, with growth accelerating to 6.9% year over year in the fourth quarter. This stands out against recent sales declines at Starbucks, which is certainly getting investors' attention and fueling the share price.
Dutch Bros is building a strong brand with its focus on friendly service, driving repeat sales with its loyalty program and menu updates. Its seasonal offerings, including its Candy Cane Mocha, contributed to a solid 2.3% year-over-year increase in transactions during the fourth quarter.
Moreover, the company is showing the potential to expand its menu to drive sales. It has been testing food with positive feedback so far. This is a great sign of brand strength, and if successful in a broader rollout, it would increase sales per customer and benefit the stock over the long term.
Dutch Bros has a huge opportunity ahead. Starbucks has more than 40,000 stores worldwide, with over 17,000 in the U.S. Dutch Bros' has estimated its potential at 4,000 shops or more. The company's recent growth in a challenging environment indicates the brand is resonating with consumers and should be a rewarding investment over the long term.
2. Toast
Restaurants are looking for technology solutions to improve margins and drive growth. Toast (NYSE: TOST) is emerging as the leading cloud-based platform to handle varied tasks from order processing to marketing. Its intuitive design has allowed it to scale quickly, serving 134,000 locations through 2024.