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3 Growth Stocks for Those Moving Up in the World

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Investors put their capital at risk for the sole purpose of generating wealth over time. So which stocks can help them achieve their goal? We asked that question to a team of Fools, and they picked Diageo (NYSE: DEO) , Marriott International (NASDAQ: MAR) , and Under Armour (NYSE: UA) (NYSE: UAA) .

A businessman puts cash in an interior pocket of his suit jacket.

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Playing the boom in high-end spirits

Travis Hoium ( Diageo ): Sometimes the best way to profit from global trends is to follow what's popular with those who are making the most money (or acting like it). Today, one of the biggest trends globally is toward high-end spirits, which makes Diageo a great investment.

Diageo has amassed a dominant position in the spirits business, with the Johnnie Walker line of scotches, Ciroc vodka, and Crown Royal and Bulleit whiskeys. Results can be choppy quarter to quarter, but long-term growing demand for high-end spirits is driving cash flow and earnings higher.

DEO Net Income (TTM) data by YCharts

As the beer and spirits businesses consolidate, there will be a small number of companies with the scale to operate profitably on a global scale. And that size means they can exert control over distribution and retail, eking out higher and higher profits along the way.

It's hard to tell what brands or products will be popular next year, much less a decade or two from now. But I would bet that Diageo will remain a power in the spirits business, and that brands such as Johnnie Walker will continue to be popular and profitable, a lot longer than the latest hot tech company will. And that's the kind of investment those moving up in the world should love.

Check in to growth

Demitri Kalogeropoulo s ( Marriott ): Marriott represents a great way for investors to gain exposure to a healthy, and growing, travel industry. The hotel chain's latest results beat management's expectations thanks to stronger travel demand both in the core U.S. market and in its international divisions. Marriott posted a 3% increase in revenue per available room (RevPAR) in the first quarter, compared with the 2% uptick executives had forecast. That growth combined with rising profitability and stronger fee revenue to push adjusted earnings up a healthy 10%. "We are pleased by our performance in the quarter across the board," CEO Arne Sorenson said in a press release.

Sorenson and his team raised the full-year growth target in response to these brightening operating trends. Marriott now sees RevPAR rising by between 1% and 3% worldwide, up from the prior range of between 0.5% and 2.5%.

That steady growth should speed up over time, with help from the newly acquired Starwood business that's helped Marriott gain significant scale in the industry. Meanwhile, its already deep portfolio of properties will continue to expand deeper into established markets and branch out into new ones. The company is on track to add 6% more rooms to its base in 2017 and has a packed pipeline of projects set to aggressively increase its guest capacity in future years.

An emerging powerhouse brand

Brian Feroldi ( Under Armour ): Consumers worldwide are usually willing to pay a premium to get their hands on brand-name apparel. Successful consumer brands such as Nike and Adidas have proved it for decades. One company that I think is poised to eventually match the success of those two industry giants is Under Armour.

Under Armour's brand looked red hot for years, as it posted quarter after quarter of at least 20% revenue growth. Its stock roared to new heights as investors assumed that its success was inevitable. However, Wall Street turned sour on the company after it posted back -to- back quarters of disappointing sales growth.

Has the company's brand lost its luster? Possibly, but the more likely culprit is the recent bankruptcies of several prominent retailers. After all, it's awfully hard to grow when a few of your big retail partners go belly-up. What's more, the company's results look much better across the pond. Last quarter, Under Armour's international sales grew by 57% when currencies are held constant. That performance hints that the company's brand is stronger than the market is currently assuming.

Under Armour recently forged new retail partnerships with Kohl's and DSW that should help revive the company's sluggish North American sales. Footwear also continues to look poised for growth, and its recent entry into the $12.5 billion sportswear market could be a big opportunity for the business.

I think there are plenty of reasons to remain optimistic about Under Armour's future. With shares trading at a discount, now could be an opportune time for growth investors to consider getting in.

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Brian Feroldi owns shares of Nike, Under Armour (A Shares), and Under Armour (C Shares). Demitrios Kalogeropoulos owns shares of Nike, Under Armour (A Shares), and Under Armour (C Shares). Travis Hoium has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Marriott International, Nike, Under Armour (A Shares), and Under Armour (C Shares). The Motley Fool recommends Diageo and DSW. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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