Chipotle is one of my top 10 US stocks… and it will remain on this select list for the foreseeable future. So let’s take a look at some reasons why CMG remains a top stock for investors.
Chipotle Mexican Grill’s Growth Story
CMG not only offers up healthy eating choices, but also healthy profits. With some of the strongest same store sales in their history as a company (up 11.1% this past quarter), they are poised to do so much more… let’s take a look.
- Domestic Growth – With approximately 1230 stores in the US, they are no where near the saturation point. In 2012, they anticipate opening between 155-165 new stores, a 13% increase. Quite frankly, I suspect they could continue this growth projection for at least another half a dozen years based simply on demand and opportunity. And, perhaps you haven’t heard, but Chipotle is bringing Asia to America too… with the debut of ShopHouse Southeast Asian Kitchen. Born out of Chief Executive Officer Steve Ells’ recent trip through Thailand and Singapore last year, he was inspired to see how he could integrate noodled soups and curries into the successful Chipotle model.
- Domestic Niche – Healthy fast food is not an oxymoron anymore now that Chipotle offers up “food with integrity” as they say. With healthy, organic, good tasting food, people seem willing to support this niche in the market which is saturated with the saturated fats of many burger joints. Even McDonalds (MCD), another favourite stock of your’s truly, has recognized the need to offer healthier offerings at their fast food empire, incorporating McCafe sandwiches, salads, and smoothies. Yet, Chipotle still stands out as a unique alternative for the consumer.
In this dividend seeking environment, many investors criticize CMG for not offering a dividend… which is not lost on the executive. However, their focus is “growth” oriented at this time… reinvesting every dime back into the company so it can continue to expand and grow their revenues. Of course, this strategy has and continues to be of benefit to the shareholder. And with the potential for international growth in the upcoming years and minimal debt, this stock is poised to return profits to investors through share price increases and, perhaps in half a dozen years, through a sustainable dividend from a company with little to no debt.
When looking for a growth stock with years of potential built in, consider Chipotle Mexican Grill (CMG), still one of the best food stocks to own.