A strong business franchise with a long track record is a desirable business.
And the prospects get even better as the world’s economy recovers this year.
Investors, however, should continue to keep a watchful eye.
The key is to ensure that growth does indeed continue and that these businesses do not lose the “spark” that made them stand out from the competition.
Here is a sampling of four sizzling growth stocks that you can consider adding to your investment watchlist.
Monster Beverage (NASDAQ: MNST)
Monster Beverage manufactures and markets energy drinks under its signature brand Monster as well as brands such as Full Throttle, Samurai and Gladiator.
The company’s products continued to enjoy strong demand as fiscal 2021’s second quarter (2Q2021) saw record net sales of US$1.46 billion, up 33.6% year on year.
Operating profit increased by 29.1% year on year to US$526 million while net profit jumped by nearly 30% year on year to US$403.8 million.
Free cash flow generation also improved for the business.
The first six months of 2021 (1H2021) saw Monster generate US$571.1 million of free cash flow, higher than the US$411.3 million generated in the prior year.
Monster is facing short-term supply issues as it cannot procure sufficient aluminium cans in the US and Europe.
There are also delays experienced in obtaining certain ingredients for their beverages.
Although these issues may crimp near-term revenue growth, they should not pose a long-term problem for the business.
Wingstop (NASDAQ: WING)
Wingstop was founded in 1994 and runs a chain of buffalo-style chicken wing restaurants offering a range of classic chicken wings, boneless wings and tenders.
The company operates and franchises over 1,600 locations worldwide as of 30 June 2021.
Wingstop opened a net of 45 restaurants in 2Q2021 and enjoyed domestic same-store sales growth of 2.1%.
Revenue for the quarter increased by 11.9% year on year to US$74 million.
Digital sales have formed a large portion of the company’s sales, taking up 64.5%, up from 63.7% in the prior quarter.
In tandem with the good results, Wingstop has increased its quarterly dividend by 21% year on year to US$0.17 per share.
Texas Roadhouse (NYSE: TXRH)
Texas Roadhouse operates a chain of 650 restaurants in 49 states and 10 countries serving a mix of hand-cut steaks, ribs, free peanuts, and freshly-baked bread.
The company has held up well over the last 18 months and has just reported an impressive set of earnings for its fiscal 2021 third quarter (3Q2021).
Revenue jumped by 37.7% year on year to US$869 million while operating profit surged by 76.4% year on year to US$61.7 million.
Net profit soared by 80% year on year to US$52.6 million, a good result as the profit exceeded the pre-pandemic level of US$36.5 million logged in the third quarter of 2019.
Comparable restaurant sales increased by 30.2% year on year and seven new restaurants were opened during the quarter.
Texas Roadhouse also declared and paid out a quarterly dividend of US$0.40 per share after suspending its dividend last year due to the tough conditions.
More growth is on the cards with the company signing its first franchise development agreement for fast-casual dining chain Jaggers during the quarter.
Jaggers is a concept developed by the company’s late founder Kent Taylor and serves up burgers, fresh salads and signature shakes.
With this signing, the company adds a third brand in its stable in addition to its namesake Texas Roadhouse and Bubba’s 33.
Domino’s Pizza (NYSE: DPZ)
Domino’s is a pizza chain that operates around 18,300 stores globally in around 90 markets.
98% of its stores are franchised and as of the end of 2020, it held a 17% market share in the global quick-service restaurant (QSR) pizza sector.
As more people stayed home to telecommute, demand for pizza surged.
The company’s 3Q2021 saw total revenue increase by 3.1% year on year to US$998 million.
Net income jumped by 21.5% year on year to US$120.4 million.
Domino’s, which has a total of 6,471 stores in the US as of 3Q2021, sees the potential to open up to 8,000 stores in its home country.
Beyond the US, it also believes that it has the potential to open up to 6,500 new stores in its top 15 markets.
If you’re a growth investor, having a resilient mindset is key to finding the next 10X stock. We show you how to do it in our latest free report, “Your Personal Blueprint to Finding the Next 10x Stock”. Click here to download it for free.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
