The Motley Foolยท2025-03-29 07:23Investment Strategy - The key to growing wealth is investing in well-run, high-quality growth stocks with a strong competitive edge and a solid track record of increasing revenue, net income, and free cash flow [1] - Rising profits and free cash flow allow companies to steadily increase dividends, providing a source of passive income [1] Rollins - Rollins is a pest control company that has shown steady growth in revenue, operating income, and net income from 2022 to 2024, with revenue increasing from $2.696 billion in 2022 to $3.389 billion in 2024 [4] - The company generated consistent free cash flow, rising from $435.3 million in 2022 to $580 million by 2024, enabling it to pay increasing dividends, with a recent quarterly cash dividend of $0.165 per share, a 10% year-over-year increase [4] - Rollins has a global total addressable market of $20 billion, with potential opportunities two to four times the current market served, driven by demographic shifts and trends in outdoor living and pet ownership [6] - The company expects to achieve above-market organic growth and convert more than 100% of its earnings into free cash flow [7] Ralph Lauren - Ralph Lauren is a luxury retailer with a solid track record of revenue and earnings growth, with revenue projected to increase from $6.218 billion in 2022 to $6.631 billion in 2024 [9] - The company generated an average positive free cash flow of around $550 million over the past three fiscal years [10] - In the first nine months of fiscal 2025, revenue rose 6.3% year over year to $5.4 billion, and net income climbed 10.5% year over year to $613.9 million [11] - Ralph Lauren raised its quarterly dividend from $0.75 to $0.825, a 10% year-over-year increase [11] - The company expects fiscal 2025 revenue to increase by around 6% to 7% year over year, with operating margin projected to increase by 1.2 to 1.6 percentage points [12] - Ralph Lauren's long-term strategy focuses on brand elevation, driving core products, and expanding store presence [13][14] Tractor Supply - Tractor Supply is the largest rural lifestyle retailer in the U.S., with revenue growth from $14.205 billion in 2022 to $14.883 billion in 2024 [15] - Free cash flow increased from $583.610 million in 2022 to $636.788 million in 2024, despite stagnation in net income [15] - The company anticipates a 5% to 7% year-over-year increase in net sales for 2025, with net income guidance between $1.12 billion to $1.18 billion [17] - Tractor Supply plans to open around 90 new stores and build its 11th distribution center, while increasing its quarterly dividend by 4.5% year over year to $0.92 [17] - The company unveiled its Life Out Here 2030 strategic initiatives, focusing on localization, direct sales, and expanding product offerings [18][19]