In This Article:
Large-cap stocks are known for their staying power and ability to weather market storms better than smaller competitors. However, their sheer size makes it more challenging to maintain high growth rates as they’ve already captured significant portions of their markets.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. That said, here are two large-cap stocks with attractive long-term potential and one whose momentum may slow.
One Large-Cap Stock to Sell:
Lowe's (LOW)
Market Cap: $130.1 billion
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.
Why Is LOW Not Exciting?
-
Store closures and poor same-store sales reveal weak demand and a push toward operational efficiency
-
Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
-
Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
Lowe's is trading at $232.50 per share, or 18.7x forward P/E. If you’re considering LOW for your portfolio, see our FREE research report to learn more.
Two Large-Cap Stocks to Watch:
Roblox (RBLX)
Market Cap: $54.79 billion
Best known for its wide assortment of user-generated content, Roblox (NYSE:RBLX) is an online gaming platform and game creation system.
Why Are We Bullish on RBLX?
-
Has the opportunity to boost monetization through new features and premium offerings as its daily active users have grown by 22.1% annually over the last two years
-
Brand halo makes it a customer acquisition machine that onboards new users at scale without spending much money
-
Disciplined cost controls and effective management resulted in a strong two-year EBITDA margin of 20.5%
At $80.68 per share, Roblox trades at 47.7x forward EV/EBITDA. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stryker (SYK)
Market Cap: $149.9 billion
With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE:SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.
Why Is SYK Interesting?
-
Average organic revenue growth of 10.4% over the past two years demonstrates its ability to expand independently without relying on acquisitions
-
Economies of scale give it some operating leverage when demand rises
-
Has the option to reinvest or return capital to investors as its 14.6% free cash flow margin is well above its peers