With inflation combined with worrying erosion in geopolitical paradigms imposing immense pressure on American households, investors need to pivot their attention toward the best large-cap stocks to buy. Featuring long-established businesses, the companies on this list enjoy robust insulation from economic rumblings. While no entity is perfectly immune to downside, businesses with a long track record may hold out better than most.
Primarily, the best large-cap stocks to buy deserve their lofty status because they can ride out the inflationary wave. For instance, the purchasing power of the dollar declined by nearly 12% since January 2020. To put this staggering figure into context, the dollar lost 10.4% of purchasing power from 2013 through 2019.
Second, inflation is now starting to affect the air pockets within the consumer economy. Previously, the concept of revenge travel bolstered certain vacation-focused enterprises. However, with Wall Street analysts growing extremely bearish on this sector, it confirms that the best large-cap stocks to buy are the ones that have some immunity toward rising prices.
Factor in geopolitical tensions that are sure to raise energy prices, and you have an ugly road ahead for the economy. Still, it also provides clarity for the best large-cap stocks to buy now — and these seven stand out among the rest.
Best Large-Cap Stocks: Costco (COST)
A Costco Wholesale (COST) warehouse in Auburn Hills, Michigan.
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With rising costs taking a bite out of real household earnings, searches for the best hedges against inflation have spiked on the internet. And while ideas like buying precious metals and investing in real estate investment trusts (REITs) are very valid, for everyday consumers, one of the most practical methodologies is to buy in bulk.
So, of course, we must talk about Costco (NASDAQ:COST) as one of the best large-cap stocks to buy. Famous — or perhaps infamous — for the ability to buy 800 pounds of mayonnaise or whatever one desires, Costco practically invented the concept of bulk purchases. Well, if you anticipate that prices will move higher — and that seems to be the consensus — it’s better to buy now than to buy tomorrow.
To be fair, COST stock has not been immune to volatility, with shares down 8% on a year-to-date (YTD) basis. However, COST stock boasts an average surprise for the past two-quarters of about 7%. Thus, it seems that Costco members are getting the memo.
Raytheon Technologies (RTX)
Raytheon (RTX) defense company logo hanging from glass building
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Raytheon Technologies (NYSE:RTX) is both relevant and controversial for its role in developing the Javelin anti-tank missile, which Ukrainian forces have valiantly used to defend their homeland against Russia. And with tensions across the world still high, new weapons have become a top buy for many countries.
It’s also worth noting that while RTX is quite choppy and currently is fighting to stay in the green, it was recently up nearly 13% on a YTD basis, which is more than can be said about the crimson-laden major indices.
Best Large-Cap Stocks: ConocoPhillips (COP)
a sign in front of the Conoco Philips office building
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Even in the best of times, the oil and natural gas industry has always sparked controversy because of the negative environmental implications. During the worst of the Covid-19 pandemic, karma seemed to bite sector players like ConocoPhillips (NYSE:COP) in the hind quarters. However, those days are behind us. We’re now in a paradigm of soaring inflation and geopolitical turmoil, cynically lifting COP stock as one of the best large-cap stocks to buy.
For me, the bottom line is that the western world’s simmering tensions with Russia effectively shelves a significant portion of global hydrocarbon supplies. Furthermore, with Turkey greenlighting the pathway for Sweden and Finland to join NATO, the west is essentially committed to isolating Russia — and perhaps China, depending on how Beijing wants to handle this — thus exacerbating energy dynamics.
Overall, COP stock is about as cynical of an argument for the best large-cap stocks to buy as you can get. But I’m not here to argue the morality of the situation; I’m just telling you like it is.
American Tower (AMT)
A magnifying glass zooms in on the American Tower (AMT) website.
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Let’s reduce the blood pressure for a bit with American Tower (NYSE:AMT). Structured as a REIT, American Tower is a global provider of wireless communications infrastructure and next-generation wireless technologies. While the individual wireless carriers often generate the most headlines, if you really want to know who runs the show regarding the actual workings of 5G, that would be companies like AMT.
Therefore, to proclaim the infrastructure provider as one of the best large-cap stocks to buy should generate little to no controversy. If you think about it, all of our favorite digital devices would be rendered at least 50% pointless without infrastructure specialists like American Tower.
Also, AMT stock is inflation and recession resistant in that, while household budgets will target discretionary expenses, they can’t impact telecommunications-related costs since connected technologies are vital to the professional sector. So, you can sleep relatively easily with AMT stock in your portfolio.
Best Large-Cap Stocks: Honeywell (HON)
Honeywell (HON) logo on front of glass building
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To be upfront, Honeywell (NYSE:HON) is on the riskier side of the best large-cap stocks to buy. On a YTD basis, HON stock is down a bit over 8%. In addition, the trailing month has been terrible for the industrial and applied sciences giant, shedding almost 7% of market value.
At the same time, I do like the discount that Honeywell is providing here. Fundamentally, Honeywell operates an “everyman” business model, with products across the entire spectrum of commerce, from aerospace, automation, safety products, industrial chemicals and many more categories. So, unless you anticipate a lack of need for utilitarian products and materials, I’d say HON stock is a safe-ish bet on the best large-cap stocks to buy.
Again, to be fair, Honeywell didn’t print the most encouraging earnings result for the first quarter of 2022, with revenue coming in 1% below the year-ago level’s result. The second quarter was a little better with revenue up 1%. However, if you’re in this for the long run, HON stock could be interesting.
BlackRock (BLK)
A BlackRock (BLK) sign out front of a BlackRock office in San Francisco, California.
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If you’ve ever watched progressive programs like “The Young Turks” or “The David Pakman Show,” you’ll know that asset management firms like BlackRock (NYSE:BLK) aren’t on their Christmas card list. Even Fox News published stories about how BlackRock is “killing the dream of homeownership.”
Perhaps because of the pressure, BlackRock issued a statement to set the record straight: the company is not buying individual houses in the U.S.
Here’s why I bring this up. BlackRock is the world’s largest asset manager, so it presumably knows a thing or two about handling a bear market. As well, even if the company was buying up neighborhood blocks or engaging in other cynical behaviors, what exactly are we the people going to do about it?
Therefore, based on the old saying “if you can’t beat ‘em, join ‘em,” BLK stock is one of the best large-cap stocks to buy. Remember, I didn’t say anything about feeling good about these enterprises.
Best Large-Cap Stocks: Duke Energy (DUK)
The logo for Duke Energy (DUK) is seen on a sign at one of the company's offices.
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Ending on a perhaps morally ambiguous note, Duke Energy (NYSE:DUK) rounds out this list of best large-cap stocks to buy. If you’re like presumably most folks, you have a love-hate relationship with your utility provider. On one hand, you take for granted the power that readily, and generally reliably, enters your home. But on the other hand, the bills can be outrageous.
The thing about Duke and its ilk, though, is that there is not much regular folks can do about it. Yes, alternatives such as solar panels combined with battery storage systems can help you get off the grid. But such measures are awfully expensive for most households. Therefore, utilities represent a permanent reality of modern life.
Do you want power? You got to pay up.
Duke Energy also has the advantage of demographic realities. Serving regions like the Carolinas and Florida, Duke is situated where many millennials are moving to. Thus, Duke features additional relevance that not all utility providers enjoy.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Editor’s note: This article is regularly updated with the latest information.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
