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2 Top Growth Stocks With Businesses Anyone Can Understand - The Motley Fool

Investors have figured out that the stock market is a great way to produce wealth over the long run. Where things can get tricky, though, is in picking the stocks that will do the best not just today or this month, but for years to come.

With many investment trends, it can be extremely difficult to understand exactly what companies are doing. If you're not a techie, then the latest software-as-a-service platform might be well beyond your comprehension. And even if you know how to drive a car, trying to understand what truly makes one electric-vehicle manufacturer better than another can give you a headache.

You don't have to invest in things you don't know about to make money in the stock market. Below, we'll look at two top-notch growth stocks with simple businesses that won't leave you wondering how they work.

1. Boston Beer

Boston Beer (NYSE:SAM) has been a surprisingly strong stock over the past year. After maintaining consistent and solid share-price gains for years, the maker of Sam Adams beer has tripled in value since the beginning of 2020.

If you're expecting to find some sort of tech-stock angle here, you'll have to look for a long time. For its customers, Boston Beer's biggest foray into the cloud comes when they find its beverages on an airplane flight. And Boston Beer hasn't come up with a way to build a subscription-based platform for beer lovers.

Hand holding glass with beer pouring in from a tap.

Image source: Getty Images.

What Boston Beer does have, though, is a lineup of popular products. Increasingly, its most successful product lines aren't actually beer.

Twisted Tea offers iced tea and lemonade drinks with a kick, while the Angry Orchard hard-cider line has a devoted following, as well. More recently, alcoholic sparkling water has become the hit new beverage, and Boston Beer's Truly brand is leading the way with flavors like pomegranate, Colima lime, and Sicilian blood orange.

Boston Beer's revenue jumped 25% in 2019, and even with the challenges of the pandemic, the company's on pace to exceed that growth rate once final fourth-quarter results come in for 2020. Net income is rising at an even faster pace. That's great news for Boston Beer shareholders, and anyone who has ever enjoyed a trip to the local watering hole can understand the beer-maker's success.

2. RH

Anyone who's ever owned a home knows that finding the right furnishings for it can be a balancing act. Most people have a budget to follow, but they also want top-of-the-line furniture and accessories that can give them the distinctive and comfortable feel they crave.

RH (NYSE:RH) aims to cater to the luxury homeowner. The retailer doesn't pull any punches, using an unusual membership model to woo its best customers to its luxurious gallery locations. CEO Gary Friedman's mission is to build an unparalleled brand known for its cutting-edge concepts in helping upscale shoppers build their dream homes.

As tough as the pandemic has been for retail, RH has also benefited from the fact that people are staying at home more and want the places they live to be better than ever. Even though store traffic has been down, e-commerce sales picked up the slack.

Going forward, RH has ambitious plans to build whole ecosystems of luxury surrounding its store locations, with plans to invest in key destinations like international ski spot Aspen. The company has become hugely profitable in the past three years, and with huge future aspirations, RH has a long growth runway ahead of it.

Invest in what you know

Many growth stocks succeed because they have great ideas that no one else could come up with. But in some cases, businesses that are very simple to understand still manage to produce strong growth. Both RH and Boston Beer aren't confusing at all, and they have promising pathways toward future expansion opportunities that could keep the growth coming for years to come.

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