1 Stock With Jaw-Dropping Growth Potential

By Joe Tenebruso Markets Fool.com

When it comes to growth investing, market opportunity is a particularly important metric. The size of the market in which a business competes -- both now and in the future -- will ultimately determine how large a company can hope to become. And investing in a company that's early in its growth curve can lead to years of handsome profits as it fulfills its growth potential.

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The challenge, of course, is finding those rare businesses that possess both a massive untapped market opportunity and strong competitive position. Fortunately, we can invest in one such business today. Read on to learn more about it.

Image source: Starbucks.

With its ubiquitous cafes seemingly already on nearly every major street corner across the country, you'd be excused for thinking that Starbucks' (NASDAQ: SBUX) days of strong growth are long gone. You'd also be wrong.

While it's expansion in the U.S. is nearing saturation, Starbucks plans to double its store count in China over the next five years, from about 2,500 locations at the end of 2016 to more than 5,000 stores by 2021. Starbucks is opening over one store per day in China -- a pace it expects to accelerate in the years ahead.

These new stores are meeting with a warm reception, with Starbucks saying that its newest stores in China are the most profitable stores in the company's 17-year history in that market. In fact, with China's massive population and strong embrace of the Starbucks brand, management believes the company's business in China will one day eclipse its U.S. operations.

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"Not only will China one day be bigger than the U.S., but our business in China will demonstrate that we will be one of the...most significant winners in terms of a Western consumer brand," said Chairman and CEO Howard Shultz during Starbucks' investor day event in December.

Starbucks' China expansion is part of its plan to grow its store base by nearly 50% over the next half decade, to a total of 37,000 from about 25,000 at the end of 2016. In turn, the company expects this unit-count growth to help drive revenue higher by 10% and earnings per share by 15% to 20% annually during that time.

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It's not just the growth of its cafes that's propelling Starbucks -- the company also continues to gain share in the consumer packaged-goods market. Starbucks is already the leader in premium single-serve and packaged ground coffee, as well as ready-to-drink (RTD) coffee products, but that's not stopping it from pressing the growth pedal to the floor.

Starbucks expanded its partnership with PepsiCo (NYSE: PEP) to begin distribution of its popular bottled Frappuccino chilled coffee beverage across 10 markets in Latin America. PepsiCo will also help Starbucks launch a new "Cold Brew Cocoa and Honey with Cream" beverage in the U.S. this year.

In China -- where Starbucks estimates the RTD coffee and energy market to be a $6 billion opportunity that will grow by 20% over the next three years -- Starbucks has partnered with Tingyi Holding Corp. to help it distribute its products in more than 37 major cities.

Additionally, Starbucks is aggressively pursuing the rapidly growing $4 billion RTD tea market with its recent launch of bottled Teavana Craft Iced Teas in partnership with Anheuser-Busch InBev (NYSE: BUD). The teas will also be rolled out to select Starbucks stores beginning in 2017 and nationwide in 2018.

Together, Starbucks expects these moves to help it double its RTD business outside of the U.S., add an incremental $1 billion in revenue, and grow its channel development profits by 75% over the next five years.

All told, the Starbucks growth story is far from over. But don't just take my word for it. Here's what Shultz had to say on the subject during the company's Investor Day: "These are the early days of the growth and development of the company. If Starbucks was a 20-chapter book, I still think we're in chapter 4 or 5."

With so much growth still to come, Starbucks is a business that investors may wish to consider.

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Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Anheuser-Busch InBev NV, PepsiCo, and Starbucks. The Motley Fool has a disclosure policy.