For investors who want to make the most of their investment dollars, there's often no substitute for a good growth stock. While dividend stocks can provide healthy, stable cash flows over the long term, growth stocks can offer much more in the way of capital appreciation. But in some cases, growth stocks can also pay dividends as well, giving investors an added bonus. The key is finding companies that have strong business models and that have lots of room to grow over the years. Below are three stocks that look great not only today but for the long term, and provide shareholders with dividends as well.
Walt Disney (NYSE:DIS) is always a solid pick, as its decades-old, household-name brand has become synonymous with quality content. That's why even though it may be taking on some tough competition when it launches its online streaming service in November, the company will have no trouble attracting users, especially at the service's very competitive price. The new Disney+ package will certainly unlock a lot of growth potential for the company, which will gain a convenient way to reach cord-cutters who might otherwise not be able to access the Disney catalogue.
And although the company might not be a young up-and-comer, it has still achieved some strong results. In its most recent fiscal year, the company generated sales growth of 7.8%. With sales of $64.8 billion over the trailing 12 months, the company is in a good position for another strong finish this fiscal year, as in 2018 it generated $59.4 billion in revenue.
Over the past two years, Disney's stock price has appreciated by more than 30%. With a lot of excitement around Disney+'s potential to steal market share from Netflix, the service could generate significant growth for the company in the years ahead, and that's why the stock could still be a very smart buy today.
Costco Wholesale (NASDAQ:COST) is another great brand that has established itself very well in the eyes of consumers. Although it's not a discount retailer, customers know that they can get a lot of value for their membership and that the bargain-hunting experience its large stores offer is something that online retailers like Amazon can't compete with. Costco is a great example of a retail stock that has not only survived some very perilous times in the industry but that has actually grown as well, with sales rising nearly 30% cumulatively over the past three years.
The company has figured out a way to grow its profits while still offering customers what they're looking for, which is not always easy to do, especially in retail. But that's what makes Costco stand out from many of its peers. The stock isn't a cheap one, trading at around 36 times its earnings over the trailing twelve months, but investors are more than willing to pay the premium for the opportunity the stock offers them in terms of not only growth but stability.
In just two years' time, Costco's share price has climbed an incredible 85%. While a recession might slow things down for the company, there's little doubt that over the long term, it will continue to draw in lots of customers. And with its recent expansion into China, there could be many more growth opportunities for the company.
Starbucks (NASDAQ:SBUX) has also captivated its clientele with a business model that has allowed the company to sell a relatively simple product -- coffee -- at some very premium rates. That's not to say the product isn't of high quality itself, but when consumers have much cheaper options readily available, it's undeniable that the brand and the loyalty customers have for it are key reasons price isn't of the utmost importance. Starbucks' commitment to purchasing its products from ethical sources and being environmentally friendly ensures that it is focusing on important issues that it knows will resonate with its customers.
With an endless amount of possible products to offer consumers and more than 5,500 locations in more than 50 countries around the world, there's still much room for Starbucks to continue to grow. China, in particular, is an area where the company could see a lot of growth. In its last fiscal year, sales of $24.7 billion were up more than 10% from the previous year, which is impressive given the size of the company.
In two years, this stock has jumped more than 50%. Like the others on this list, it remains a safe bet to continue to rise in value.
All of these stocks are solid options for investors to hold over the long term. The recurring theme in these picks is branding, as that's something that competitors will find difficult to replicate. Consumers have come to trust these companies, and that's why they'll remain good buys for the foreseeable future.