Companies that succeed in tapping into massive market opportunities can lead to handsome gains for their shareholders. As an investor, ignoring the short-term noise and staying focused on the company's opportunity will help you succeed in building wealth in the stock market. This is the key to buy-and-hold investing.
Three Fool.com contributors recently selected stocks they think could make rewarding buy-and-hold investments. If you have some cash -- say $3,000 -- available to invest that isn't needed to pay off debt or monthly bills, read on to learn why these Motley Fool contributors think Shopify (NASDAQ: SHOP), Sweetgreen (NYSE: SG), and Dutch Bros (NYSE: BROS) are good places to park that money long-term.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »
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John Ballard (Shopify): Shopify helps provide the operating system for a lot of e-commerce. It has developed a platform of essential tools that businesses can use to set up an online store, in addition to a robust set of back-end solutions, such as analytics, apps, and payment processing for businesses large and small.
It's a profitable company generating revenue from subscriptions and fees from services. Shopify has been serving online merchants for over a decade, but is still posting stellar growth. Revenue grew 27% year over year in the first quarter.
Shopify has ample opportunities to keep growing at high rates for many years. Shopify Payments remains an important growth driver for the company's gross merchandise volume (GMV), which is the total value of all transactions completed by one of Shopify's merchants. It just launched Payments in 16 new markets, increasing the number of markets where Payments is available from 23 to 39, which will open up a lot more growth.
Shopify also sees significant growth opportunities internationally. Europe's GMV grew 36% year over year in Q1. This indicates a lot of merchants worldwide are still discovering the value Shopify brings to the table.
Despite the stock's incredible run over the last 10 years, Shopify's market cap (share price times shares outstanding) is just $149 billion, yet it's going after a global e-commerce market that is valued at $6 trillion and still growing, according to eMarketer. There's enough room for growth that Shopify's market cap could reach $1 trillion one day, making the stock a very rewarding investment.
Jeremy Bowman (Sweetgreen): Sweetgreen is one of the most promising growth stories in the restaurant industry. However, shares of the fresh produce slinger have been getting tossed in the compost pile lately after two disappointing earnings reports and weak guidance for 2025.
Like other restaurant chains, Sweetgreen is feeling the effects of weakening consumer sentiment and nervousness around tariffs. Additionally, the Los Angeles wildfires weighed on the company's performance in the first quarter as L.A. is both its headquarters and a major market. In the first quarter, Sweetgreen's same-store sales fell 3.1%, and the company now expects flat same-store sales for the full year.
As a result of that weakness, the stock is trading down about 69% from its peak late last year.
However, Sweetgreen still has a lot of long-term growth potential. The company plans to grow its unit base by around 16% this year, adding 40 new stores, and it's rolling out its automated Infinite Kitchen system to more stores, which should save on labor costs and improve throughput, thereby improving customer service and satisfaction.
While Sweetgreen's comparable sales have been weak recently, its restaurants remain popular, as its average unit volume of $2.9 million shows. That's on par with industry leaders like Chipotle Mexican Grill and hot restaurant stocks like Cava. Considering the discount in the stock and a price-to-sales ratio of just 2.4, which compares to Chipotle at 6.1 and Cava at 8.9, Sweetgreen looks like a bargain if it can return to comparable sales growth and achieve profitability.
Over the long term, the company appears to have the brand strength and expansion potential to do just that. At a bargain price, now looks like a great time to scoop up shares of the restaurant stock.
Jennifer Saibil (Dutch Bros): If you enjoy drinking coffee, you've potentially heard about Dutch Bros. But if you live on the East Coast, you may not yet have had a chance to sample its beverages. Dutch Bros got its start on the West Coast, and it is rapidly expanding its drive-thru-focused coffee shop chain into the South and Midwest at the moment, gaining loyal fans and rolling down a huge growth runway.
The company just surpassed 1,000 stores, and it recently announced plans to reach 2,029 stores by 2029. More than a clever trick, that goal implies an accelerated store opening rate. It opened 151 stores last year and plans for 160 this year. As it expands, it's entering new states and establishing a strong brand.
Long-term, management sees the opportunity for 7,000 stores. It recently upped that estimate from 4,000, and it could get raised again. Investors can be confident about its ability to get there because it's performing so well today, with products and a brand that are resonating with people in all of its regions.
In the 2025 first quarter, revenue increased 29% year over year. Comparable sales (comps) were up 4.7%, with a 1.3% increase in transactions. Management reports that detail so investors know that the increase isn't only coming from price hikes, and customers are coming in more frequently. That's a great sign of engagement, especially when other restaurants are feeling a lot of pressure, and it suggests that Dutch Bros has a bright future ahead.
It's also becoming profitable at scale. It has reported two straight years with an annual net profit, and net income increased from $16.2 million to $22.5 million in the first quarter, despite an unfavorable economic backdrop.
Considering the obvious upside here, Dutch Bros stock isn't cheap. It trades at a forward one-year P/E ratio of 88, which is very pricey even for a top growth stock. If you can buy today and hold it for many years, Dutch Bros could be a standout long-term stock to buy with $3,000.
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Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in Cava Group, Chipotle Mexican Grill, Shopify, and Sweetgreen. John Ballard has positions in Cava Group. The Motley Fool has positions in and recommends Chipotle Mexican Grill and Shopify. The Motley Fool recommends Cava Group, Dutch Bros, and Sweetgreen and recommends the following options: short June 2025 $55 calls on Chipotle Mexican Grill. The Motley Fool has a disclosure policy.