The stocks of large, stable, industry-leading companies are often called "blue-chip stocks." They are prized by risk-averse investors due to their financial strength.

Within the fast-food industry, McDonald's is the prototypical blue-chip stock. Yet the traditional fast-food industry is being undermined by a growing trend toward healthy eating and a preference for fresh food. Fast casual chains satisfy these desires at price points not too much higher than traditional fast food restaurants.

Chipotle is leading the fast-casual revolution (Photo: The Motley Fool)

This trend could gradually elevate shares of fast-casual market leader Chipotle (NYSE:CMG) to blue-chip status. Indeed, Chipotle already exemplifies many of the qualities of a blue-chip stock.

Solid long-term performance

Chipotle went public nearly a decade ago, in January, 2006. Since then, the company has been consistently profitable. In fact, aside from a brief (and minuscule) decline in earnings during the worst part of the Great Recession, Chipotle has steadily grown earnings throughout its history.

CMG EPS Diluted (TTM) Chart

CMG EPS Diluted (TTM), data by YCharts

Chipotle's consistent earnings power is one of the best signs that it could eventually become a blue-chip stock. The worst recession in almost a century had hardly any impact on Chipotle, which suggests that it could be around for a long time. (Many other fast casual chains ran into trouble in 2008 and 2009.)

Chipotle's business model is also very investor-friendly. New locations require fairly small capital investments. In the first half of 2014, Chipotle opened 89 new restaurants on a capital budget of just $103 million. The low cost of expansion has allowed Chipotle to generate strong free cash flow for many years in a row despite its rapid growth trajectory.

CMG Free Cash Flow (TTM) Chart

CMG Free Cash Flow (TTM), data by YCharts

Chipotle has used this consistent free cash flow to build up a rock-solid balance sheet. As of the end of June, Chipotle had $1.1 billion of cash and investments and no debt.

Big enough to be a blue-chip stock

From a size perspective, Chipotle is well on its way to blue-chip stock status. The company surpassed $1 billion of quarterly revenue for the first time in Q2, and analysts expect Chipotle's revenue to continue rising from there.

Indeed, Chipotle's revenue grew 28.6% last quarter, helped by a combination of new restaurant openings, higher menu prices, and stronger traffic. That was the fastest revenue growth rate for Chipotle since before the Great Recession -- when Chipotle was a fraction of its current size.

CMG Revenue (TTM) Chart

CMG Revenue (TTM) vs. Growth, data by YCharts

Eventually, Chipotle's revenue growth trajectory is bound to moderate due to the law of large numbers. However, the company still has years -- and perhaps even decades -- of double-digit growth ahead of it.

Becoming a blue-chip stock

Chipotle is still in high-growth mode, so it doesn't have a well-established capital return policy, as most blue-chip stocks do. That said, while Chipotle has never paid a dividend, it does use some of its free cash flow to repurchase stock from time to time. In the first half of 2014, Chipotle spent $81 million on buybacks.

In the long run, Chipotle could certainly become a dividend payer. As noted above, Chipotle's growth is not very capital-intensive. Chipotle will therefore have plenty of cash to return to shareholders in the coming years -- even if it continues growing rapidly.

Chipotle shows all the signs of being a blue-chip stock in the making. It is on pace to surpass $10 billion of annual revenue in less than a decade. It is consistently profitable and generates strong free cash flow. Lastly, it has a rock solid balance sheet. Chipotle is thus well-positioned to disrupt its way to the top of the restaurant industry.

Adam Levine-Weinberg owns shares of Chipotle Mexican Grill. The Motley Fool recommends Chipotle Mexican Grill and McDonald's. The Motley Fool owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.