The millennial generation is the largest in history and is filled with people who are at the peak of their careers. This generation makes considerable money and has the financial flexibility to dictate the types of products and services that go mainstream.
Businesses have adjusted their offerings to serve millennials and Gen Z. These generations will soon become the leaders of consumer spending, but we are already seeing this thesis play out with millennials.
Some companies have done an exceptional job of winning over millennials and look like enticing long-term investments. These three stocks can continue to generate positive returns due to an influx of millennial customers.
Microsoft (NASDAQ:MSFT) is a staple in many funds and portfolios. The tech giant offers exposure to several high-growth industries that attract millennials. PCs, cloud computing, video games and office software top the list.
The firm continues to report revenue and earnings growth. The company started fiscal 2024 with 13% year-over-year revenue growth in the first quarter. Net income jumped by 27% year-over-year to bring the stock’s forward P/E multiple to 35.
Microsoft’s ventures into artificial intelligence can drum up more growth. Artificial intelligence can strengthen the retention rate of Microsoft’s core products. For instance, Microsoft’s Copilot will give Microsoft Office users more choices across the tech giant’s key apps and resources.
The stock has consistently outperformed the market. Shares have gained 63% over the past year and are up by 260% over the past five years. The corporation also has a 0.80% dividend yield. While the yield is low, Microsoft usually raises its dividend by 10% or more per year.
Many millennials look for ways to eat healthy and seek out convenience. Chipotle (NYSE:CMG) certainly fits the bill as a healthier fast food restaurant chain. The company got started in 1993 and has expanded to over 3,300 locations in the U.S. alone.
Chipotle has the revenue and net income growth trends to support further expansion. The company grew revenue by 11.3% year-over-year in the third quarter of 2023. Net income increased by 21.8% year-over-year which supported profit margin expansion.
Customers have been enjoying the company’s Chiptolanes, which allows customers to make digital orders and receive them in a drive-through. These lanes tap into the convenience millennials seek and are a big timesaver.
The company only came out with its 500th Chipotlane in 2022. These lanes drive more sales for the company, and expanding this opportunity can help the company continue its trend of double-digit year-over-year revenue growth.
Millennials love good deals and don’t expect that trait to ever go out of style among future generations. Many people turn to wholesalers like Costco (NASDAQ:COST) to get great discounts on quality products.
The company has been in business for over 40 years and continues to grow. Costco recently reported net sales growth in its December 2023 report which included double-digit growth rates for e-commerce.
Costco drove $241 billion in sales over the last 12 months ended November 26, 2023. The wholesaler generated those numbers with 128 million square feet in total real estate and 316,000 employees worldwide. It has 870 warehouses worldwide with an emphasis on North America. The company has a 92.8% renewal rate among its North American customers.
The company has close to 130 million total cardholders which helps the company increase sales and earnings. The large user base has been a boon for the stock. The equity is up by 41% over the past year. Shares have gained 219% over the past five years.