A new bull market has lifted the spirits of many investors over the last few months. And despite ongoing economic challenges around the globe, quality businesses are still reporting meaningful financial growth.
If you're looking for great stocks that you can buy in 2024 and hold in your portfolio for many years to come, there are some fantastic businesses that look like no-brainer investments for long-term investors. Here are two names to consider buying in the new bull market and holding for the long haul.
1. Intuit
Intuit (INTU +0.40%) is known for its various software-as-a-service (SaaS) offerings like marketing automation and email platform Mailchimp, tax-preparation solutions TurboTax, and accounting software Quickbooks. The company divides its business into four primary segments.
The first is its small business and self-employment segment, which includes offerings like Quickbooks and Mailchimp. Then there's the consumer division, which revolves around its personal tax-preparation products and services offered via TurboTax.
The third segment is Credit Karma, which is the personal finance platform it purchased back in 2020. Through Credit Karma, users can access information about credit scores, identity monitoring, recommendations for various financial products, and more. Intuit's final business segment is called ProTax, an online tax software designed specifically for professional accountants.
The largest driver of Intuit's revenue by far is its small business and self-employed segment. In the first half of the company's fiscal 2024, the company reported total net revenue of $6.4 billion, up 13% from the same six-month period in the prior fiscal year. Of that total, $4.6 billion was attributable to its small business and self-employed segment, $679 million to the consumer business, $780 million to Credit Karma, and $316 million to the ProTax segment.
NASDAQ: INTU
Key Data Points
The company has a steady track record of overall profitability. In the first half of its fiscal 2024, operating income totaled $676 million, while net income came to $594 million. Those two figures represented respective year-over-year increases of 95% and 186%. And over the trailing 12 months, Intuit has brought in free cash flow (FCF) of $4.1 billion and operating cash flow (OCF) just shy of $5 billion.
The company has also been proactive in incorporating various generative artificial intelligence (AI) capabilities across its various offerings. From more recent additions like Credit Karma (with features like AI recommendations embedded into the business) to its generative AI-powered financial assistant Intuit Assist, the company is working to remain competitive in a rapidly evolving fintech landscape.
Management estimates that Intuit's various products and services give it access to a total addressable market worth more than $300 billion. As for the stock, shares have notably outpaced the S&P 500's total return over the trailing five-year period. Intuit is up 153% in that time frame compared to the market's total return of 97%.
While the stock pays a rather modest dividend that yields less than 1% (an attribute that is not uncommon with higher-growth companies), that dividend has risen 92% in the last five years alone. Considering these factors, even a modest investment in this stock could pay off handsomely in the long run.
2. Dutch Bros
Dutch Bros (BROS +2.52%) is a chain of drive-through coffee shop locations distributed across the country. The company has 831 locations in 16 different states, and while it's been in business for more than three decades, it just held its initial public offering (IPO) in 2021.
Dutch Bros is in the midst of an aggressive expansion plan. It opened 159 new shops in 13 states in the full-year 2023, and 146 of those were company operated. That was also the most new-store openings in the history of the company. Dutch Bros continues to focus heavily on store-owned locations rather than franchised ones.
The company is targeting anywhere from 150 to 165 new stores in 2024 alone. Over the coming years, Dutch Bros foresees growing its store count to more than 4,000 locations nationwide. This isn't a far-flung goal by any means. In the company's 2023 earnings call, CEO and President Christine Barone noted:
Over the past five years, we have now opened over 500 system shops, and we have grown our company operated shop count from 90 to 542, an average annual growth rate of 43% over those years. In 2023, our development represented 24% growth in total system shop count and 37% growth in our company operated shops.
NYSE: BROS
Key Data Points
This strategy is more cost heavy in the short term. However, Dutch Bros' rapid expansion of its national footprint is paying off in considerable revenue growth, rising gross profits, and significant improvements to the bottom line.
In 2023, Dutch Bros generated total revenue of $966 million, a 31% increase from 2022. Of that total, $858 million was derived from company-operated shops, a revenue figure that was up 34% from the prior year. Gross profits from company-operated shops rose 49% year over year to $180 million, and company-operated shops' gross margin hit 21%, up 200 basis points from 2022.
Dutch Bros turned a profit according to generally accepted accounting principles (GAAP) last year. That figure totaled $10 million compared to a net loss of $19 million in 2022. The coffee shop industry is growing and represents a multibillion-dollar market opportunity even as competition in this space is steep, and persistent worries about inflation are curtailing the trajectory of consumer spending.
This business looks to be headed in the right direction while still at a much earlier stage of growth than more well-known names in the industry. Even though shares haven't performed well, the business and profitability are improving. That could present an intriguing buying opportunity for the forward-thinking investor.
