Two Stocks with Potential to Build Long-Term Generational Wealth

Two Stocks with Potential to Build Long-Term Generational Wealth

Finding emerging consumer brands while they are small is a simple and effective way to build lasting wealth in the stock market. Let’s take a look at fast-growing companies that are poised to generate healthy profits and could deliver massive gains for shareholders over the next decade and beyond.

1. DraftKings

One way to find long-term winners is to identify companies that benefit from technological advancements. THE online sports betting the market is expected to reach $65 billion over the next five years, and DraftKings(NASDAQ:DKNG) The first-mover advantage when launching on mobile devices years ago made it the undisputed leader in this market.

DraftKings has over 30% market share in North America and continues to gain more customers. It reported fourth-quarter revenue of $1.2 billion, up 44% from last year.

What’s also notable about DraftKings’ performance is the growth in spending per customer. Average revenue per monthly single payer was $116 in the fourth quarter, up 6% year over year and almost double the same quarter three years ago.

It is clear that DraftKings can continue to increase revenue for its existing customers in states that have already legalized online sports betting. The addressable market in states where the company already has a presence is expected to grow from $20 billion to $30 billion by 2028.

More states are expected to legalize sports betting, which should justify the stock’s high valuation. However, if DraftKings succeeds in expanding into new markets like lottery, where it recently announced the acquisition of leading lottery operator Jackpocket, that could make the stock a monster winner for investors over the course of the year. next decade.

2. Cava Group

Cava Group (NYSE:CAVA) represents a huge opportunity in the Mediterranean fast casual dining market. 2023 ended with 309 restaurants generating $177 million in quarterly revenue. Its growth rate and a strategy emphasizing consistency and profitability should make the stock a great investment.

Cava closed 2023 by reporting sales in the same restaurant growth of nearly 18% in the fourth quarter, driven by a strong traffic trend. There is clearly a strong demand for this type of cuisine in the fast-casual market.

It is important to note that Cava follows a profitable model of opening stores. For the full year, the company reported net income of $13.3 million, a significant improvement from the loss in fiscal 2022. Investors should expect strong growth long-term profits, given the company’s good profit margin at the restaurant level.

Lack of consistency and execution can destroy shareholder returns for restaurant stocks, but Cava has his eye on the ball. Management mentioned during its last conference call that it was investing in artificial intelligence to facilitate the operation of its restaurants. The company is also working to refine its loyalty programs to encourage more frequent traffic and improve training to provide a consistent experience across each location.

Cava is clearly successful, but its current restaurant footprint is only a fraction of that of more established chains. As it opens more restaurants, the company is expected to generate profitable growth that will generate significant gains for patient shareholders.

Should you invest $1,000 in DraftKings right now?

Before buying stocks at DraftKings, consider this:

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John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends Cava Group. The Motley Fool has a disclosure policy.

2 actions that could create lasting generational wealth was originally published by The Motley Fool

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