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Large-cap stocks usually command their industries because they have the scale to drive market trends. The flip side though is that their sheer size can limit growth as expanding further becomes an increasingly challenging task.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. Keeping that in mind, here are two large-cap stocks with attractive long-term potential and one whose existing offerings may be tapped out.
One Large-Cap Stock to Sell:
Regeneron (REGN)
Market Cap: $63.97 billion
Founded by scientists who wanted to build a company where science could thrive, Regeneron Pharmaceuticals (NASDAQ:REGN) develops and commercializes medicines for serious diseases, with key products treating eye conditions, allergic diseases, cancer, and other disorders.
Why Does REGN Worry Us?
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Sizable revenue base leads to growth challenges as its 6.7% annual revenue increases over the last two years fell short of other healthcare companies
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Efficiency has decreased over the last five years as its adjusted operating margin fell by 12.3 percentage points
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Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Regeneron’s stock price of $605.39 implies a valuation ratio of 15.1x forward P/E. If you’re considering REGN for your portfolio, see our FREE research report to learn more.
Two Large-Cap Stocks to Watch:
Ross Stores (ROST)
Market Cap: $45.68 billion
Selling excess inventory or overstocked items from other retailers, Ross Stores (NASDAQ:ROST) is an off-price concept that sells apparel and other goods at prices much lower than department stores.
Why Are We Positive On ROST?
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Aggressive strategy of rolling out new stores to gobble up whitespace is prudent given its same-store sales growth
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Locations open for at least a year are seeing increased demand as same-store sales have averaged 3.5% growth over the past two years
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Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
At $138.93 per share, Ross Stores trades at 21.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Zoetis (ZTS)
Market Cap: $74.41 billion
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE:ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.