The tech sector is certainly an excellent place to find quality growth stocks. Indeed, several tech companies have trounced the average market returns over the past few years. However, the tech industry isn’t the only place to find growth stocks.
Investors who do their due diligence can find such stocks hidden even in the most unlikely of places. Let’s consider two growth stocks that investors should consider buying: Waste Connections Inc (TSX:WCN)(NYSE:WCN) and Restaurants Brands International (TSX:QSR)(NYSE:QSR).
Waste Connections
Over the past five years, shares of Waste Connections have grown by about 220%. This performance is head and shoulders above that of the average return provided by equity markets. Given the company’s top and bottom lines have been increasing at a nice clip, it isn’t surprising.
What’s behind this performance? Waste Connections is one of the leaders in its industry and is second only to its competitor Waste Management Inc (NYSE:WM) in many of the markets it services.
In total, Waste Connections has well over six million customers, be it residential or business properties, across more than six Canadian provinces and 40 US states.
Could Waste Connections continue growing? It certainly appears possible. The firm benefits from a wide and cost-efficient network, and adding more areas to this network puts little additional strain on the company’s expenses.
Waste Connections will likely acquire a larger portion of the market share and perhaps put some of its smaller competitors out of business. The waste collection business is in no danger of disappearing anytime soon. Thus, growth investors could definitely benefit from adding shares of Waste Connections to their portfolios.
Restaurants Brands International
Restaurant Brands is a fast food corporation that was formed when several leading fast food chains in the U.S. and Canada decided to join forces. Since the company was created back in 2014, RBI has grown its share price by about 114%.
On the one hand, it is very difficult for companies in the fast food industry to build a strong competitive advantage.
Barriers to entry in the industry are practically non-existent, and switching costs aren’t high either. However, brand loyalty is a powerful thing, and that is what RBI benefits from the most.
All three firms under its umbrella are internationally renowned and have amassed a loyal following over the years. This factor gives RBI an important advantage moving forward. Since 2013, the company’s revenues have grown by more than 370%, and the firm is likely not done growing.
Investors should consider the possibility of one — or more — top fast food chains being added to its umbrella. RBI is already the third largest fast food chain in the world. Buying shares of the company could prove to be very profitable as it continues on its upward trajectory.
The bottom line
Waste Connections and Restaurants Brands both have the potential to increase much more than they already have. Of course, no one can predict the future with certainty, but investors would do well to consider adding shares of these companies to their growth portfolios.
