Warren Buffett Just Made a Big Bet on Domino’s Pizza, but This Restaurant Chain Is Growing Much Faster

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Warren Buffett makes headlines every time he buys or sells a stock. Most recently, his holding company, Berkshire Hathaway, added two new stocks to its equity portfolio: Pool Corporation and Domino’s Pizza.

This is the first time Buffett has taken a stake in the largest pizza chain in the world, and it’s not a surprising pick. Domino’s is a pretty classic Buffett choice due to its global brand name, dominance in its industry, dividend, and resilience as a cheap eatery. But it’s also a mature company with steady, slow growth — sales were up 5.1% in the third quarter, with a 3% increase in comparable sales.

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If you invest like Buffett, Domino’s could be a candidate for your consideration. But not every individual investor should invest like Buffett. He runs a holding company and is answerable to shareholders, and his goals are different than the average investor’s.

If you have a long-term horizon and some appetite for risk, you might be interested in growth stocks that don’t fit the Buffett approach. They aren’t all super-risky tech bets, and many offer incredible growth opportunities without significantly upping the stakes. Consider Dutch Bros (NYSE: BROS), a relatively young coffee chain that’s demonstrating serious growth and has massive potential.

Dutch Bros is like every other coffee shop chain, serving up all kinds of custom coffee beverages. But it has developed a distinct brand and identity and attracted a loyal fan base of customers. It’s focused on speed and customer service, and its goal is to create an atmosphere of warmth and fun.

Although the first Dutch Bros shop has been around for 30 years, the company only started to roll out as a national chain a few years ago. It went public in 2021 with around 500 stores, and three years later, it has 950 stores in 18 U.S. states and growing.

The response has been positive, and sales have been growing dramatically. Revenue increased 28% year over year in the third quarter, and same-shop sales were up 2.7%. Management noted that same-shop transaction growth was the highest in two years. That’s important because it means people are buying more, and the same-shop sales growth isn’t all coming from price increases. It’s a sign of viability and growth potential.

Companies in high-growth stages are often unprofitable, as they spend more than they get to lay a strong foundation. Dutch Bros has been profitable for several quarters, including the last three. Net income increased from $13.4 million to $21.7 million in Q3.

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