Given enough time, most quality stocks will eventually double, triple, quadruple, and even quintuple their value. That’s just how capitalism works. No stock will necessarily reach these milestones at the same time as any other equity, though; some will move faster than others.
With that backdrop, here’s a closer look at three tickers with great shots at turning a $1,000 investment today into $5,000 as soon as 2030. Notice that each company brings something special to the table at an ideal time.
The world needs a serious pick-me-up if the recent sales growth achieved by energy drink outfit Monster Beverage (MNST 0.77%) is any indication. The company’s top line is up nearly 16% through the first three quarters of this year, extending a span of comparable revenue growth underway for over a decade now. Analysts don’t see any real slowdown on the horizon either, modeling 11% sales growth next year that’s apt to be topped when all is said and done.
Yes, Monster Beverage is the outfit behind energy drinks of the same brand name, but it’s not just Monster. The company also manages Nos, Full Throttle, Predator, and a handful of other energy drink brands. Monster is its flagship, though, making up the lion’s share of its annual top line of around $6 billion.
It’s not a lot. But that’s the point — there’s room for the entire category to continue growing. And it is. Mordor Intelligence estimates the energy drinks business is on pace to grow by more than 8% per year through 2027, jibing with other growth outlooks for the industry. Monster has something of a secret weapon, however, helping it win more than its fair share of this growth.
Coke has been a Monster stakeholder and partner since 2015. The relationship is still being increasingly leveraged for growth, though, and yet there’s so much more that could be done going forward. Take cannabis, for instance. While Coca-Cola doesn’t offer cannabis-based drinks right now, it is entering new and once-unlikely markets.
For example, early this year, Coca-Cola entered the alcoholic beverage fray by inking a developmental deal with Constellation Brands…the same Constellation reportedly mulling an acquisition bid for Monster. It’s noteworthy simply because Constellation also owns a sizable stake in cannabis company Canopy Growth Corp., and Coca-Cola has at least entertained the possibility of entering the cannabis arena in the recent past.
It’s unclear how or if any of these possible combinations and partnerships will shake out. What is clear is that Monster Beverage is well-positioned for whatever the future holds on this front.
Perhaps the biggest reason Amazon (AMZN -1.44%) shares could quintuple their current value by 2030 is that shares are down a whopping 46% from last year’s peak; simply recovering that loss would mean nearly a 100% gain on its present price. Nevertheless, this company’s backstory has far more potential than a mere recovery of the stock’s recent setback.
This backstory is no longer about e-commerce, however.
While selling stuff online remains its biggest business as measured by revenue, it’s not even close to being its biggest moneymaker. That honor belongs to its cloud computing arm, Amazon Web Services (AWS). Even prior to this year, when soaring expenses dragged its e-commerce operation into the red, its cloud computing division was driving roughly two-thirds of its operating income.
The company’s cloud computing profitability profile hasn’t really changed much since then. It’s just grown. AWS’ revenue through the first three quarters of this year is up 32%, pulling its operating income up 33% with it. In light of Technavio’s expectation for annualized growth of 19% for the cloud computing market through 2026, Amazon doesn’t necessarily even need its e-commerce business’s paper-thin profit margins to be restored to their pre-pandemic levels to continue growing its bottom line at a double-digit pace.
The kicker: Whether or not e-commerce itself is ever profitable again for Amazon may be irrelevant. Its advertising business fueled by the shopping site’s traffic is a fast-growing profit center in and of itself. The company did a hefty $9.5 billion ad sales last quarter alone, up 25% year over year. And it’s still largely learning the advertising business.
Finally, add AutoZone (AZO 0.73%) to your list of stocks that could turn $1,000 today into $5,000 by 2030.
Surprised? As unbelievable as it seems, the auto parts and car-care business isn’t just consistent but also high-growth. AutoZone’s revenue growth of 11% for the fiscal year ending in August is both impressive and in line with the industry’s long-term norms. The stock’s performance is equally impressive. AutoZone shares are up 50% for the past five years, despite their steep (and likely temporary) sell-off since the end of last year, and are more than twice their value 10 years ago.
Those are solid numbers but hardly a quintupling. There’s good reason to believe the next eight years could prove remarkably more fruitful for AutoZone than the past eight have been, however. That’s the sheer cost of a new car.
There was a time when consumers recognized that it made more sense to purchase a new automobile than continue spending more and more money just to keep an aging vehicle running. With Kelley Blue Book reporting that the average price for a new car sold in the United States rose to a near-record $48,281 in October, though, the math of the matter changes.
It’s once again making increasingly more sense to invest in the automobile you already own — even more so when the economy is wobbling as it is now. Underscoring this argument is S&P Global‘s estimate that the average vehicle being driven on U.S. roads is a record-breaking 12.2 years old. While it’s a testament to their quality and durability, it also suggests they’re highly fixable.
It all plays right into the hand AutoZone is holding, of course, particularly in light of the likelihood that car prices won’t be meaningfully dropping anytime soon.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, Constellation Brands, Monster Beverage, and S&p Global. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola. The Motley Fool has a disclosure policy.