At Curia, our job isn’t to prepare you for 2026. 

This may seem an odd start to a report called “3 Stocks for 2026,” but what I mean is that while all of us have to invest in 2026, and those of us looking to deploy new money in 2026 will likely welcome new ideas, our job isn’t only to prepare you for 2026.

Rather, at Curia, we’re equipped to prepare you to handle retirement and “life expenses” when they come (and they will). 

Put more simply: These stocks are, in our estimation, good companies that are attractively priced right now. But it would be a pity to think of them as mere “2026 trades.” Rather, they’re intended to be stocks you can buy with a minimum three- to five-year horizon, barring unexpected thesis changes. 

But it is 2026, and no fundamental investment can be divorced from its times: The current US market environment is beholden to forces unique not in their presence, but in their magnitude: Geopolitical uncertainty – particularly between the US and China –  inflation uncertainty, uncertainty around the Federal Reserve’s independence, a market disproportionately dominated by a handful of large tech stocks that themselves are disproportionately dominated by expectations around AI.

Yes, I said “disproportionately,” which reveals a bias we’re acting on in this report: We’re sidestepping AI for valuation reasons. 

There’s at least a chance we’re in an AI bubble, and those of us who own a capitalization-weighted index fund – i.e., likely you, if you’re an investor reading this – already have a decent AI bet going whether we want it or not.

For this report, Curia Financial analysts Shaoping Huang, Matthew McClintock, and yours truly dug through the left-behinds of high quality, non-AI stocks with strong competitive advantages (measured by high returns on invested capital), founders or managers with skin in the game, profitability, and strong financial well-being – the corporate equivalent of a company you’d be proud to bring home to show Mom and Dad. 

The three ideas reflect our effort for you – and what Curia stands for, generally: Guiding our tribe away from the pitfalls that, academic studies show, ensnare most investors, and toward wholesome, quality companies that help our portfolios as they help the economies we live in. 

Responsible investing in responsible companies, in other words. We expect it to work for you in 2026, and in every year thereafter. 

Enjoy the report, and send any questions to [email protected] where a real human will read and reply. 

Jame Early
CEO, Curia Financial

Disclaimer

This analysis is provided for informational and educational purposes only and does not constitute investment advice or a recommendation to buy or sell any security. The views expressed reflect the author’s opinion as of the date of publication and are subject to change without notice. All financial data cited are based on publicly available sources believed to be reliable, but accuracy is not guaranteed. Past performance is not indicative of future results. Investors should conduct their own due diligence or consult a licensed financial advisor before making any investment decisions.

Diageo: A Stock That Ages Well

In a market drunk on AI, chip wars, and trillion-dollar valuations, patience has become a rare commodity. While capital chases anything AI-related, Diageo — maker of whisky, gin, and stout — continues to compound value slowly and predictably in oak barrels across generations.

The market may label Diageo “old economy,” but businesses built on heritage, scarcity, and human ritual tend to outlast technological cycles. After years of steady premium-driven growth, the world’s largest spirits company now trades near decade-low valuation multiples and pays a 4% dividend. 

The bad news: Diageo had a terrible 2025 – shares fell 25% (as of this writing), versus a 15% gain for the S&P 500. How did a traditional long-term winner underperform by 40 percentage points? 

Partly, the market rewarded sexier stocks in 2025, hence Diageo’s low multiple. But this maker of more than 200 premium and ultra-premium brands’ sales have remained flat since 2022 thanks to slowing demand from Asia (China’s white spirits business fell by 60% in the first quarter of 2025), from fear of GLP-1 agonist drugs reducing additions of all stripes, as well as from homebody Gen Zs who recreate with video games or alternative chemicals. 

These are valid reasons for a stock to pull back. But our belief is that these aren’t reasons for Diageo’s stock to pull back as much as it did. Our bet, in other words, is that the current AI-and-meme-stock-loving market is throwing baby Diageo out with the bathwater – and that investors who buy now will be rewarded as a rising middle class and long-term mean reversion in Diageo’s performance shine through. 

Investment Thesis:

Diageo’s bread and butter is expensive swill: The stuff you’re more likely to give as a gift than pound through on a Friday night. The good news is that in recent decades, premium booze has been a faster-growing category worldwide than moderately priced alcohol – especially in gentrifying emerging markets where gift-giving branded alcohol is done as a mark of social status. 

In this regard, Diageo has two sustainable advantages: First, its brands are time-honored and well-established; an upstart would need a lot of time and money to build up a similar cache. Second, many of Diageo’s drinks are aged for years: A competitor can’t start selling 12-year-old whisky immediately.  

We’re betting that as the world gets richer and certain of Diageo's near-term speed bumps subside (currency and volume pressures, plus leverage that’s a bit high), a more level-headed-by-then market will more than compensate for any structural demand shift away from alcohol to reward shareholders.

At roughly 15 times 2025 earnings and a 4% dividend yield, Diageo offers a blend of defensive income, brand durability, and capital gain potential. As product mix and margins normalize, total returns in the low-to-mid-teens over the next three to five years look reasonable to us.

Business Model & Competitive Advantages:

Let’s zoom in on the global alcoholic-beverage industry — one of the world’s oldest and most resilient consumer sectors. Valued at $2.4T in 2024 and projected by Future Market Insights to reach $2.6T in 2025, it should grow about 6% annually through 2032. This growth isn’t driven by people drinking more, but by people drinking better.

Within the bucket, the spirits category, worth roughly $656B in 2025, should grow at a steady 3–4% CAGR – slightly above global GDP growth. The real acceleration lies in premium and super-premium tiers, projected to surge from $467B in 2025 to $1.1T by 2035 — a 9% CAGR.

This is the space Diageo commands — holding leading positions in Scotch whisky, gin, and liqueurs, and major share in tequila and vodka through flagship brands such as Johnnie Walker, Don Julio, Tanqueray, Smirnoff, and Baileys.

Diageo’s advantage rests on five pillars:

1. Brand Heritage:
Centuries-old names — Guinness (1759), Johnnie Walker (1820), Tanqueray (1830) — anchor trust that money cannot buy.

2. Pricing Power / Premiumization
Premium-and-above tiers now make up 61% of sales; premium spirits globally compound at ~10% CAGR, far above total alcohol.

3. Scale & Distribution
Operations in 180 countries and 110+ manufacturing sites form one of the most efficient supply chains in global beverages.

4. Category Breadth
Revenue spans Scotch (24%), tequila (11%), vodka (9%), beer (16%), and liqueurs/other spirits (40%).

This mix gives Diageo built-in diversification: when one category or region softens, another typically accelerates.

5. Barriers to Entry
Aging cycles of 3–20+ years, geographic protections (Scotch, Tequila), and billions tied in aging inventory create a moat of patience few rivals can match.

Financial Fortress

Diageo’s numbers tell the same story as its brands: strength built on time and consistency. Fiscal year 2025 net sales reached $20.2B, generating $2.7B in free cash flow — enough to comfortably fund a 4% dividend and buybacks (Diageo repurchased $1 billion in shares in 2024).

Profitability remains world-class: adjusted operating margins of 28% and ROIC of 7.7%, down from its long-term 11%–13% average but still above the company’s typical 6% WACC, meaning Diageo continues to create value even in a softer cycle.

We expect Diageo’s valuation to improve, and thanks to a 4% dividend yield, investors are essentially paid to wait. As margins and ROIC recover, valuation should follow.

More on Why the Stock Is Down

Despite its long-term strengths, Diageo’s shares trade at decade-low multiples because near-term optics have turned unfavorable.

1. Softer volumes across key markets.
Latin America, Africa, and parts of Asia experienced weaker consumer demand as inflation and tighter household budgets delayed purchases of premium spirits. These are discretionary products, and consumers tend to “pause but not abandon” higher-priced categories during uncertain periods.

2. Currency translation masking underlying trends.
With revenue spread across US Dollar, Brazilian Real, Mexican Peso, Nigerian Naira, and British Pound Sterling, Diageo’s reported numbers have been pulled down by foreign exchange volatility. In several cases, local-market demand held up better than the reported results suggest — but currency swings made the optics look weaker.

3. Higher leverage and a slower margin recovery.
Net debt sits around 3.4 times EBITDA (earnings before interest, taxes, depreciation, and amortization; a non-GAAP but commonly cited profitability measure), and margins have not yet rebounded from the past two years of cost inflation. ROIC has slipped below historical levels, and the market is likely waiting to see clearer progress on management’s Accelerate plan (a much-touted internal project to reduce leverage and improve profitability) before reassessing Diageo’s rightful multiple.

These pressures are cyclical, not structural. They reflect a moment in the economic cycle rather than a change in the long-term economics of the world’s strongest premium-spirits franchise. But they do explain why sentiment is muted — and why patient investors are being offered a rare entry point.

Taken together, these factors explain the stock’s weakness today — but they don’t explain its long history of stability. To understand why Diageo’s valuation gap may close over time, it’s worth looking at how the business has behaved in previous market downturns.

Resilience Through Market Cycles

Risks

History shows how Diageo behaves when markets break. But understanding the future requires looking at the risks that could shape the next cycle. These risks don’t undermine the moat, but they do influence the pace at which value compounds.

Macroeconomic sensitivity: Spirits are discretionary; recessions delay upgrades to premium tiers.
Currency volatility: 180-country footprint creates foreign exchange translation noise.
Lifestyle shifts: Gen Z drinks less in volume, more in quality — potentially a positive for premiumization, but a risk, too.
GLP-1 drugs: Could reduce consumption, especially because a small portion of hardcore drinkers accounts for a disproportionate share of consumption. That said, GLP-1 drugs are likely more of a threat to lower-cost alcohols.
Regulation: Sin-stock taxes and marketing restrictions recur but vary by market.
Supply chain & climate: Agave, barley, and water face rising volatility.

Valuation & Conclusion

Diageo offers what is rare today: quality at a discount. The stock trades at 15 times 2025 earnings, 11 times EV/EBITDA (“EV” is enterprise value, which equals the market value of stock plus the market value of debt, minus cash), and 20 times free cash flow — all well below decade averages.

Our fair-value estimates cluster between $160 and $190, implying 35–45% upside if margins and ROIC revert even halfway to historical norms. A 4% dividend yield and steady buybacks support low-to-mid-teens annual returns without heroic assumptions.

Short-term headwinds — leverage, currency, GLP-1 noise — may keep sentiment muted. But none alter the long-term economics of owning the world’s largest premium-spirits franchise.

Bottom line: Diageo is not a stock for traders chasing momentum; it’s a position for investors willing to let value mature. In a market obsessed with speed, Diageo proves that patience still compounds.

Rollins: Profiting from Pest Control

Business Basics  

You’d expect the #2 pest control company in the US to have a more memorable origin story: Perhaps that of a founder traumatized by a roach-infested childhood home, living out a lifelong vendetta, motivated equally by profit and psychic wounds.  

In reality, Rollins (NYSE: ROL) – which owns Orkin and other pest control brands – began as an AM radio station in Roanoke, Virginia.  

Rollins Broadcasting, founded in 1948 by John and O. Wayne Rollins, was funded by O. Wayne’s successful car dealership, and would later include cable TV, trucking, and toxic waste operations before being pared down in the 1980s and 1990s to a pure-play pest control business. Rollins is simply the most successful child of the Rollins brothers’ business empire.  

But the non-imagination-capturing nature of Rollins’ business is precisely its charm for investors in 2026. 

The AI bubble, ongoing meme stock craze, and shaky giddiness that have propped up the US stock market are all liabilities in disguise. Why not sidestep that with a boring company whose services aren’t threatened by AI, aren’t vulnerable to business cycles or recessions, and will be just as relevant in 2126 as they are in 2026? 

Welcome to Rollins.  

Family-controlled Rollins has about 20% market share in the US pest control industry. Larger competitor Terminx has 22%, with the remaining 58% spread across 30,000 to 40,000 mom-and-pop competitors.  

Those mom-and-pops are fodder for Rollins to consume: It typically buys 30-40 per year. Those acquisitions helped Rollins to grow revenue 10.3% last year – in a mature industry. 

Investment Thesis 

There are many kinds of “good” stocks. For this report, we want to offer you the sleep-at-night kind of good stocks. The downside: They’ll notably underperform tech and especially AI stocks when those are on a tear (like now). But their solid fundamentals should keep their shareholders safe. 

Rollins in particular is a “no thesis” stock. No-thesis stocks aren’t waiting for a catalyst – a drug approval, a regulatory change, a buyout, or anything in particular to do their thing. They just chug along as they always have and hopefully always will.  

Rollins holds all the intangibles we look for in a good, sleep-at-night stock. The company has strong finances, strong management, and proven steadiness during market bubbles (and their bursting). Let’s explore this together one by one. 

Financial Fortress: Return on invested capital (ROIC) is the pest control of investment metrics: boring, but essential in evaluating a company. ROIC compares return available to both debt and equity providers of capital to that capital. If a company borrows money at, say, 8%, it had better earn at least 8%, for instance (equity providers of capital implicitly expect returns, too, even if not contractually stipulated). Typically 12% or higher is good. ROICs tend to converge on industry averages over time, so if a company sustains an ROIC above that for a while, it’s a sign that the company is doing something right. Rollins is.   

Rollins has a very strong ROIC compared to the broader market and that is exactly why it is such a strong sleep-at-night stock to choose from: Rollins has returned an average of 19.89% on its invested capital over the last three years. This is music to the ears of someone searching for a strong, durable stock because it signals to shareholders and potential investors like yourself that Rollins is able to reinvest their profits at exceptional rates of return. 

Management: The success of Rollins is due in part to the consistency of management and a family ownership model. Rollins is currently still controlled by the Rollins family, which founded the company in 1948. Gary Rollins, the son of founder O. Wayne Rollins, served as the CEO from 2001 to 2022 and now acts as the Executive Chairman of the Board at Rollins.  

Academic evidence shows that family-owned businesses often outperform their non-family counterparts; this may be because they play the long game. When your name is on the door, and your kids’ inheritance depends on what happens inside it, you think differently. The family-ownership model breeds accountability, commitment, and pride, which in turn drive efficient operations and a unified vision for the company’s future. Short-term profits take a backseat to long-term value creation and sustainable growth. . 

Past Bubble Performance: Rollins isn’t just a pest control specialist; it’s a bear-market survivor with a proven track record of outmuscling downturns, beating the S&P 500 during both the dot-com bubble and the Great Recession of 2008. From the beginning of 2000 through the end of 2003 – when dot-com stocks were soaring and crashing – Rollins saw revenue growth of 15%, consistent earnings per share growth, and an increase in free cash flows. Likewise, from the beginning of 2007 to the end of 2008 – Rollins saw revenue growth of almost 19% and consistent growth rate in both per-share earnings and free cash flows (for comparison, US corporate earnings overall declined 57% during the Great Recession). This is a company that doesn’t just weather storms, it finds a way to thrive in them. 

Risks  

Rollins’ biggest risks stem from its acquisition-heavy growth model and family-led management. The company depends on buying 30 to 40 local operators each year, a formula that works until it doesn’t. Overpaying, misjudging culture fit, or losing acquired customers could erode the strong ROIC that defines Rollins’ success. So far, discipline has prevailed under Gary Rollins and the family’s majority voting control. But as leadership transitions to the next generation, investors should watch for rising leverage or reckless deal-making, both signs that it might be time to call the exterminator on the stock, not the bugs. 

Summary 

Rollins isn’t going to double overnight, and that’s exactly the point. We expect it to modestly outperform the S&P 500 over the next five years, powered by steady fundamentals rather than market hype. The stock may trend 15% up or down over a few months, but that’s just noise. You don’t buy Rollins for a quick trade; you buy it as a solid, sleep-at-night stock to hold for at least three years. Rollins may protect homes from pests, but its stock should help protect your portfolio from the bite of an AI bubble. 

Copart: The Fortress Built from Wreckage

What do moose collisions, junkyards, and stock market outperformance have in common?

Answer: Copart (CPRT).

Copart began as a single junkyard in Vallejo, California, in 1982, but today has morphed into a nationwide (and, increasingly, worldwide) marketplace for buying and selling salvaged cars. 

This company makes money when someone crashes a car — by buying wrecked cars, or car parts, if the collision was bad enough – and then selling the wreckage, often via an online auction. 

It’s not sexy. But Copart has turned wrecked cars into a global, capital-efficient, network-powered machine that has delivered over 800% total returns from 2016 to 2025, and in our view has the ingredients to compound at 10% to 14% annually from here.

Some investors obsess over artificial intelligence, but Copart’s edge comes from something harder to replicate: land, logistics, and a marketplace that hums every time a fender meets fate. AI may write code and drive headlines, but it doesn’t move wrecked cars, navigate zoning boards, or run a 300-acre salvage yard in Tampa (or any other salvage yard, for that matter). Copart’s moat is built on the boring, immovable parts of the real world that software can’t touch.

Investment Thesis:

Copart began in 1982 as a single salvage yard in California. It bought more and standardized operations over time. In the mid-2000s, it made a big shift to an online platform, and more recently, it’s been expanding overseas to serve foreign buyers of U.S. vehicles and parts, as well as supporting both local buyers and local sellers in the countries where it operates salvage facilities. 

Copart runs more than 250 locations across North America, Europe, the Middle East, and Brazil, supported by over 1 million registered buyers. Copart gets 83% of its revenues from the US.

Much of Copart’s land assets can’t be easily replicated due to zoning and environmental limits. Management continuity has also mattered. Founder Willis Johnson remains Chairman. Former CEO Jay Adair — who led Copart’s move to online auctions — now serves as Executive Chairman. CEO Jeffrey Liaw and CFO Leah Stearns run day-to-day operations. The company consistently points to the experience and stability of its leadership team as a competitive advantage in a logistics-heavy business.

Looking ahead, several trends support the business: rising repair costs, more severe weather-related claims, increasing vehicle complexity, and insurers’ ongoing focus on cost and cycle times.

At roughly 25 times earnings, Copart isn’t a hidden gem, though it’s cheaper than the overall S&P 500’s 30 PE. But with no debt, high margins, strong cash flow, and long-term structural tailwinds, we think it’s set up to deliver steady, mid-teens annual returns over the next few years.

Stock Performance & Why It’s Down

Over the past year, Copart’s stock has fallen about 29%, while the S&P 500 gained nearly 14%.

This is a sharp reversal for a company that delivered over 800% total returns from 2016 to 2024. 

Even more striking: in just the last six months, CPRT dropped 34% while the S&P 500 rose 14.5%. 

For a business long considered “boring but bulletproof,” this level of divergence is unusual. Here’s why it happened.

1. Insurance volumes dipped.
About 81% of Copart’s inventory still comes from insurance total-loss claims (if an accident is big enough that a vehicle’s repair costs exceed its replacement cost, it’s declared a “total loss” and the insurance company will take possession of the car and sell what remains to a company like Copart), but insurer volume softened. Higher used car values, rising repair thresholds, and premium-fatigued drivers dropping coverage meant fewer cars hitting auction — and slower supply growth.

2. A moat got dinged.
Insurance company Progressive shifted some volume to rival IAA, a company owned by publicly traded RB Global (RBA). Copart is estimated to have roughly ⅔ of the online salvage auction market, but in a market with two big players, one company’s loss tends to be the other’s gain.

3. Growth cooled.
Growth decelerated modestly. Revenue for the fourth quarter of 2025 rose 5.2% year-over-year — not bad, but slower than the 7.5% growth seen in the prior sequential quarter. 

4. Valuation cracked under pressure.
Copart had been trading at elevated levels — near 40 times earnings and high free-cash-flow multiples — which left the stock vulnerable in a higher-rate environment. When growth moderated, even modestly, the market quickly adjusted those premium expectations. 

5. The narrative lost the market’s love.
Between insider sales, a CEO transition, and a market obsessed with AI, Copart faded from view. Despite strong results and a fortress balance sheet, it became one of 2025’s most “oversold” large caps.

In our view, this is a pause — not a reversal. The moat is intact, cash is piling up, and the headwinds look cyclical, not structural: Lower total-loss volumes, softer selling prices, and higher yard costs all reflect temporary swings in used-car pricing, weather events, and commodity markets. For long-term investors, this may be a rare mispricing in a business that hasn’t fundamentally changed.

Risks

Although Copart’s business is built on a durable model supported by the predictable nature of accidents, even this kind of reliability comes with the occasional bump in the road. A significant share of Copart’s revenue comes from a relatively small group of insurance companies that sell Copart vehicles directly, which leaves the company vulnerable if even a portion of that supply is reduced or redirected to a competitor. 

Capacity constraints, in addition to supply constraints, pose an issue for Copart as well. When facilities fill up after major weather events or sudden spikes in insurance companies’ total-loss volume, Copart may be unable to accept additional inventory, putting strain on key relationships with insurance companies and creating an operational traffic jam across their system.

Management consistency has played a key role in managing the unpredictable surges in supply or demand within their industry. In addition, Copart’s management team facilitated the company’s international expansion through strategic acquisition. Copart has long benefitted from stable, seasoned leadership, but losing key management members that have been critical to the efficient expansion of the business could lead to Copart veering off course.

Summary

Copart is not an AI rocketship that will double overnight, and that is exactly why it’s a good fit for a long term portfolio. Despite the recent pullback on Copart’s stock, fundamentals remain the engine ready to drive this stock forward: zero debt, 36.5% operating margins, 250+ global facilities, and more than 1 million registered buyers within its network.

In addition to the financial fundamentals, Copart’s largely predictable of incoming wreckage has strategically positioned it as critical to the business model of insurance companies – increasingly, globally. The recent pullback has created a buying opportunity for investors looking for a stock that can outperform the market over the next three to five years.