When analyzing a stock, it can be helpful to consider many different variables, but one of the most important is the company's competitive position. By definition, a market leader holds the largest fraction of total sales in a given industry -- that's good for the top line. But there are less obvious benefits, too. For instance, a market leader often has a stronger brand name, more customers, and more data than its rivals, and that scale can reinforce itself through cost efficiencies.

Building on that idea, Intuit (NASDAQ:INTU) and Adobe (NASDAQ:ADBE) may not be the most trendy names on Wall Street, but both companies have established themselves as leaders in growing industries. That should translate into market-beating gains for long-term shareholders.

Here's what you should know.

Digital artist working at her computer.

Image source: Getty Images.

1. Adobe

Adobe is a giant in two different verticals of the software industry. Its Digital Media business comprises applications for creativity and document workflows, including gold standards like Photoshop for image editing, Premiere Pro for filmmaking, and Acrobat for PDF management. And its Digital Experience business comprises a suite of software and services for analytics, marketing, and commerce.

While Adobe is best known for its creative software, Forrester Research recently recognized the company as a leader in enterprise marketing and content management, and Gartner named Adobe the top player in the digital experience industry, citing its brand recognition and extensive partner ecosystem as key differentiators.

Not surprisingly, Adobe has delivered strong financial results like clockwork.

Metric

Q3 2019 (TTM)

Q3 2021 (TTM)

CAGR

Revenue

$10.6 billion

$15.1 billion

19%

Free cash flow

$3.8 billion

$6.6 billion

32%

Data source: YCharts . TTM = trailing 12 months. CAGR = compound annual growth rate.

Adobe's innovative culture is one of its greatest assets. Rather than resting on its laurels, the company continues to build new products and implement new technologies. For instance, Adobe Sensei is an artificial intelligence engine that supercharges its software, automating tasks for creative professionals, targeting content for marketers, and personalizing recommendations for commerce teams.

Likewise, Adobe's palette of creative applications continues to evolve. Substance 3D is an ecosystem of software and content for 3D designers, and Aero allows artists to create immersive augmented reality experiences. To that end, Adobe's ability to stay on the cutting edge should make it a key player in emerging trends like the metaverse, and it should help the company capture more of its massive market opportunity, a figure management believes will reach $147 billion by 2023. That's why this stock is a smart buy for long-term investors.

2. Intuit

Intuit is the gold standard in accounting and tax preparation software. QuickBooks helps small and medium-sized businesses (SMBs) and self-employed individuals track expenses, run payroll, and accept payments; and QuickBooks Live pairs clients with professional accountants, allowing them to offload bookkeeping tasks to experts. Collectively, Intuit is the U.S. industry leader by a long shot, holding 77% market share in accounting software.

Intuit's portfolio also includes TurboTax, software that helps consumers file state and federal income taxes. During the 2021 tax season, the company extended its ironclad leadership in this industry, growing its market share 10 percentage points to 73%. And similar to QuickBooks Live, TurboTax Live allows consumers to get advice from tax professionals.

In both cases, management believes connecting clients with financial experts is a significant opportunity, and those products highlight Intuit's goal of becoming an AI-driven expert platform. On that note, the company has also infused its software with artificial intelligence. For instance, Intuit uses an AI technique called knowledge engineering to convert written tax regulations into computer code, and it uses natural language processing to build intelligent chatbots.

Based on Intuit's strong financial performance, it's fair to say that its growth strategy is paying off.

Metric

Q1 2020 (TTM)

Q1 2022 (TTM)

CAGR

Revenue

$6.9 billion

$10.3 billion

22%

Free cash flow

$2.2 billion

$3.2 billion

21%

Data source: YCharts. TTM = trailing 12 months. CAGR = compound annual growth rate. Note: Q1 2022 ended Oct. 31, 2021.

Intuit recently acquired Mailchimp, the second most popular sales and marketing platform behind Salesforce, according to Okta's 2021 Business at Work report. That move could supercharge its QuickBooks portfolio, giving SMBs the tools to attract and retain customers.

Intuit also recently acquired Credit Karma, a platform that connects consumers with financial products like loans, credit cards, and insurance. According to CEO Sasan Goodarzi, this will allow Intuit to build a "mobile, personal financial assistant." The move will also create synergies with other products, allowing consumers to deposit tax refunds directly into high-yield savings accounts through Credit Karma Money.

Collectively, Intuit puts its market opportunity at $260 billion, and with management's strong growth strategy already paying off, this stock looks like a great long-term investment.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.