3 Stocks Poised for Huge Growth Over the Next Decade

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Long-term investors should always think of their stocks in terms of decades instead of quarters. But it can be tough to find companies with business models that can continuously grow for several decades. Today, three of our Motley Fool contributors will examine stocks that make the cut: Adobe Systems (NASDAQ: ADBE), Constellation Brands (NYSE: STZ), and Kinder Morgan (NYSE: KMI).

A high-growth, high-margin cloud play

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Leo Sun (Adobe Systems): Several years ago, Adobe Systems converted its flagship software products -- including Photoshop, Premiere, After Effects, and Acrobat -- from locally installed software to cloud-based services. It also expanded its analytics, marketing, and advertising cloud services with a series of acquisitions.

As a result, Adobe became a high-growth cloud player that leveraged the market dominance of its Creative Cloud products like Photoshop to expand its presence in enterprise cloud services. Since its Creative Cloud products don't face much meaningful competition, Adobe maintained its pricing power while preserving its competitive moat -- two strengths that many other cloud service providers lack.

That's why Adobe's revenue rose 25% to $7.3 billion last year, as its non-GAAP operating income grew 40% and its net income climbed 42%. On a GAAP basis, its operating and net income both rose 45%. Wall Street expects Adobe's revenue and non-GAAP earnings to rise 23% and 58% this year. Based on those forecasts, Adobe doesn't seem expensive at 34 times forward earnings -- even after the stock's near-80% rally over the past year.

Demand for Adobe's cloud services should remain strong over the next decade, and its strength across multiple markets should give it plenty of room to cross-sell and up-sell additional services. This makes Adobe a top investment in the software-as-a-service market, which Gartner expects to grow from $60.2 billion to $117.1 billion between 2017 and 2021.

This beer stock is smokin'

Dan Caplinger (Constellation Brands): Consumer stocks that specialize in helping their customers have a good time often do extremely well as investments, and Constellation Brands offers a great example of how best to come up with a strategy that can take advantage of changing consumer tastes. The beer and spirits specialist has done an exceptional job of putting together a strong portfolio of much-loved products, including the well-known beers Corona and Modelo. In an era in which many beer drinkers are moving beyond the most popular domestic names in the industry, Constellation has positioned Corona in particular as distinctive from other brands.

Constellation is also making major moves to expand. Craft beer has been a key growth area within the broader category, and Constellation's purchase of Four Corners Brewing opens the door to potential new products in the future.

At the same time, Constellation's $3.8 billion investment in Canopy Growth (NYSE: CGC) has been groundbreaking, and it gives Constellation the right to take a controlling interest in the marijuana stock in the future. With all the attention that cannabis products are getting in light of the coming legalization of recreational marijuana in Canada, Constellation has grabbed a first-mover advantage among major consumer companies in what could eventually become a huge high-growth opportunity in the U.S. as well. There's plenty of risk involved, but Constellation is on the cutting edge and stands to post a major win if its strategic investment in Canopy goes well.

A gas-fueled turnaround

John Bromels (Kinder Morgan): Driven by advances in fracking and other drilling technologies, domestic oil and gas production is booming. And with energy prices finally on the rise after a yearslong slump -- and with global oil and gas demand booming -- industry players are poised to reap huge rewards.

Kinder Morgan, which operates the largest natural gas pipeline network in the U.S., is uniquely positioned to take advantage of these industry trends. The company's stock took a major hit in 2015 after it announced it was cutting its dividend. Earlier this year, though, Kinder Morgan boosted its dividend by 60% and is now yielding about 3.6%. It has also bought back some $2 billion of its shares. But Kinder Morgan's big appeal isn't just thanks to shareholder-rewarding moves like these.

The company is growing its capacity in response to increasing demand, with about $7 billion in pipeline expansions currently underway and another $2 billion to $3 billion per year moving forward. That includes a 430-mile pipeline serving the red-hot Permian Basin. Production has been so strong in the Permian that the pipeline already has almost all its capacity spoken for, which should ensure a steady revenue stream for Kinder for the foreseeable future.

With energy production in the U.S. showing no signs of slowing down, Kinder Morgan seems ripe for growth. Factor in a share price that's been languishing in the high teens for all of 2018 -- despite the dividend hike, share buybacks, and operational successes -- and now looks like an excellent time to scoop up some shares.

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Dan Caplinger has no position in any of the stocks mentioned. John Bromels owns shares of Kinder Morgan. Leo Sun has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Adobe Systems and Kinder Morgan. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.