While companies that produce the newest tech innovations might seem more exciting to invest in than those that purvey burritos or toilet paper, investors' focus should be on growing their money, and growth can come from anywhere.

The share prices of both Target (NYSE:TGT) and Chipotle Mexican Grill (NYSE:CMG) almost doubled in 2019, and if the past is any indication, they'll continue to deliver value for investors.

Chipotle Mexican Grill: Hot food makes for a hot stock

While many restaurants have closed their doors temporarily during the pandemic, Chipotle has kept most of its locations running on a to-go and delivery model, with only 100 closed out of more than 2,600. Customers responded. Apparently, it feels good to eat burritos when you're stuck at home and are trying to retain a semblance of normal life.

Chipotle Mexican Grill -style meal.

Image source: Getty Images.

During the first quarter, comp sales increased 3.3% while revenue was up 7.8% to $1.4 billion, which reflects the strong start the quarter got off to before comps decreased 16% in March. Digital sales increased by more than 80% and accounted for 26.3% of sales. Adjusted diluted earnings per share came in at $3.08, a 9.4% decline year over year.

For the sake of comparison, let's take a look at how this period compared with a typical quarter for the fast-casual chain:

Quarter

Revenue growth

Comps growth

Digital growth

Digital Sales as a % of Total Sales

Q1 2020

7.8%

3.3%

81%

26%

Q4 2019

17.6%

13.4%

78%

20%

Q3 2019

14.6%

11%

89%

18%

Data source: Chipotle Mexican Grill earnings reports.

What's interesting to me is that the digital growth wasn't outsize when compared to previous quarters, though it did become a more important part of the picture. That points to the fact that the company had already been investing in its digital platform as a growth driver before the word "coronavirus" entered the common English lexicon. That kind of focus on industry trends is what has fueled the company's earlier growth -- and also its failures, such as Shophouse Southeast Asian Kitchen, an Asian restaurant concept that closed in 2017. 

Chipotle opened 140 restaurants in 2019, ending the year with a total of 2,580 U.S. locations, and the stock rose 94% during the year. The company has opened 28 new locations so far in 2020 and has another 49 under construction, but given the impacts of the pandemic (and with guidance withdrawn for the remainder of the year), it's not clear that it will reach its original projections.

In the meantime, Chipotle fans have been avidly awaiting the reopening of those restaurants' dining areas: A company survey found that most pre-pandemic customers expect to go back to patronizing the chain with the same frequency as before, or even more often. Additionally, to keep the momentum going, the company will open more drive-thru "Chipotlanes," as stores with them have produced higher sales than those without them. Now that U.S. states are beginning to ease their pandemic-related restrictions, the company is likely to see improving comps, especially through its digital sales channels.

And although it seems like there are already plenty of Chipotles dotting the landscape, management says it still sees an opportunity to double the chain's U.S. restaurant count. If it continues to open locations at the rate of about 150 a year, that's another 17 years until what it currently sees as saturation. That's a lot of potential growth just within its core concept, not to mention the possible introduction of new concepts or potential acquisitions.

Chipotle had just 489 locations when it went public in 2006; the store count has increased more than five-fold since then and the stock has increased more than 2,000%. Shares might not come close to doubling again in 2020, but long term, this company looks like a very solid investment.

Target: Improving everyday shopping

Target stock skyrocketed by 94% in 2019, as several of the retailer's strategies to improve the shopping experience and optimize operations dovetailed. One area it has been focusing on is increasing the number and range of its exclusive store-owned brands. These brands compete with more expensive, popular brand-names, but cost the company much less, producing higher margins.

Shipt worker at Target.

Image source: Target.

Same-day delivery via Shipt, as well as its buy online and pick up in store or via drive-up options, have also been key for the company, driving sales in 2019 and making Target an attractive choice for customers during the COVID-19 pandemic. Target has also created a profitable system for fast delivery that has allowed it to lower expenses while meeting customer expectations. Its model using stores for much of its digital order fulfillment -- they handled 80% of orders in the first quarter.

"When digital demand exploded as guests began to shelter in place, our teams had the tools, processes and capability to flex to meet that shift in demand," CEO Brian Cornell said.

This played out in an interesting first quarter for the retail chain -- sales soared by 10.5% as customers stocked up on essentials, but earnings decreased as people reduced their spending on non-essentials. However, the company said it's maintaining its dividend despite the disappointing earnings, which demonstrates its strength.

Right now, there are 1,781 Targets in the U.S., and 75% of Americans live within 10 miles of one of those stores. Still, compare that to rival Walmart, which has 4,753 U.S. stores, and it looks like Target has a lot of room to grow.

The stock price has been volatile this year as investors seem unsure about whether the conditions that are cutting into its earnings will continue beyond the short term. People are beginning to venture out of their homes in greater numbers again, but record-high joblessness may affect purchases of high margin items, and it could be some time before earnings return to pre-pandemic levels.

Target stock might not bring investors the same high returns in 2020 as it did in 2019, but long term, the retailer has great growth opportunities and an effective model that should allow it to get back up to speed and create more value for investors.