1 Mid-Cap Stock with Competitive Advantages and 2 We Brush Off
Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. Keeping that in mind, here is one mid-cap stock with a long growth runway and two that may have trouble.
Two Mid-Cap Stocks to Sell:
Domino's (DPZ)
Market Cap: $14.65 billion
Founded by two brothers in Michigan, Domino’s (NYSE:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Why Are We Cautious About DPZ?
- Annual revenue growth of 5.3% over the last six years was below our standards for the restaurant sector
- Estimated sales growth of 5.4% for the next 12 months is soft and implies weaker demand
Domino’s stock price of $431.59 implies a valuation ratio of 22.4x forward P/E. Check out our free in-depth research report to learn more about why DPZ doesn’t pass our bar.
International Paper (IP)
Market Cap: $20.62 billion
Established in 1898, International Paper (NYSE:IP) produces containerboard, pulp, paper, and materials used in packaging and printing applications.
Why Do We Pass on IP?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 2.4% over the last five years was below our standards for the industrials sector
- Free cash flow margin dropped by 11.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
International Paper is trading at $38.98 per share, or 22x forward P/E. Read our free research report to see why you should think twice about including IP in your portfolio.
One Mid-Cap Stock to Watch:
Jack Henry (JKHY)
Market Cap: $13.55 billion
Founded in 1976 by two entrepreneurs who saw the need for specialized banking software in the early days of financial computing, Jack Henry & Associates (NASDAQ:JKHY) provides technology solutions that help banks and credit unions innovate, differentiate, and compete while serving the evolving needs of their accountholders.
Why Is JKHY Interesting?
- Additional sales over the last two years increased its profitability as the 15.3% annual growth in its earnings per share outpaced its revenue
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $187.26 per share, Jack Henry trades at 29.2x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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