12 Boring Businesses With Strong Track Records

Investing in the stock market often comes with the appeal of the flashy, the innovative, and the revolutionary. However, the most consistent returns can often come from companies that operate in sectors deemed “boring.” These are businesses that, although they might not make headlines, have proven their worth and resilience over time. Let’s dive deeper into some of these companies and understand the intricacies of their success.

• Rollins, ROL

• TransDigm Group, TDG

• Sherwin-Williams, SHW

• Copart, CPRT

• Kone, KNEBV

• Troax Group, TROAX

• Lamb Weston, LW

• Waste Connections, WCN

• O'Reilly Automotive, ORLY

• Carriage Services, CSV

• Alimentation Couche-Tard, ATD

• KABE Group, KABE

While pest control may not be a glamorous industry, Rollins, as one of the world's leading extermination firms, has delivered a stunning 45x return excluding dividends in the last twenty years. Their consistent performance underscores the universal and timeless need for their services.

Rollins impressive 15-Year CAGR, averaging 41% ROIC

TransDigm Group is the backbone of the aviation industry. By providing components and systems for almost every kind of aircraft (commercial as well as military), they’ve solidified their position. Notably, their Amsafe seatbelts are a staple in the sector. Their extensive catalog ensures that they cater to diverse needs..

TransDigm has a revenue CAGR of 15% the last 15 years

The color on our walls and the sheen on various objects often come from paints and coatings by Sherwin-Williams. Their products, though seemingly simple, play an essential role in aesthetics and protection.

The paint and coating company is a quality compounder

Behind the scenes of the automobile industry is Copart. The company runs the world’s largest marketplace (including a huge physical infrastructure of yards like the one below) and helps insurance companies offload vehicles that have seen better days.

Further reading: The Rise of Copart: From Salvage Yard to Tech Giant

Free-Cash-Flow CAGR of 50% the last decade

If you've ever been in an elevator or escalator, you wouldn't be surprised to see if it was from the Finnish company KONE. The great thing about the elevator and escalator business is that the switching costs are quite severe, which results in high-margin recurring service revenue.

Still compounding – 30 years later

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Offering niche products like machine guarding fences, pallet racking systems, and storage cages, Troax Group has found a lucrative segment. Their specialization and quality have made them leaders in this unique space.

Troax has had an impressive Free-Cash-Flow CAGR of 26%

The pleasure of indulging in crispy fries from global chains like McDonald's can be credited to Lamb Weston. They’ve mastered the art and science of potato processing and are the largest potato product manufacturer in the world. Their tagline, “Seeing possibilities in potatoes,” captures their innovative approach to a staple food item.

Supplying McDonalds, among others, with fries have been a lucrative business for Lamb Weston

Waste management is an industry that will never run out of demand. Waste Connections stands out as one of the premier entities ensuring our surroundings stay clean. Their operations exemplify the very essence of a recurring revenue business.

Waste Connections have achieved a solid CAGR over the last 15 years

The automotive aftercare market is enormous, and companies like O’Reilly Automotive have capitalized on this. By providing quality auto parts and related products – an incredible business when operated right – they’ve ensured customer loyalty and consistent growth.

The last 15 year's O'Reilly Automotive have seen an impressive Free-Cash-Flow CAGR of 45%

An industry as old as humanity itself, funeral services have a certain solemnity and respect associated with them. Carriage Services, with its sensitive and professional approach, has managed to offer solace to many while maintaining an exceptional business record.

Carriage Services have achieved an exceptional business record the last decade

Alimentation is one of the largest gas station and convenience store operators in the world. Through its more than 14,000 locations, the company sells over 35 million gallons of fuel, almost half a million hot dogs, and 750,000 cups of coffee, per day. As boring as it might seem, the gas station business has proven its resilience during tough times, and Alimentation grew its revenue by 5% and 8% respectively during the Dot-Com Bubble and the Great Recession. 

Alimentation Couche-Tard have grown their earnings twice as fast as their revenue the last decade

KABE is a leading player in the caravan and motorhome industry and a top choice for travel enthusiasts and adventurers alike. Throughout various economic cycles, KABE has showcased its adaptability and resilience. For instance, during economic downturns when international travel might not be an option, many turn to local adventures, ensuring a consistent need for KABE’s offerings.

KABE has achieved a positive growth rate even during economic downturns

While the allure of the next tech unicorn might seem enticing, there’s undeniable value in the consistent, “boring” performers. As Peter Lynch said: “A company that does boring things is almost as good as a company that has a boring name, and both together is terrific.”