2 Large-Cap Stocks with Solid Fundamentals and 1 We Brush Off
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.
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. Keeping that in mind, here are two large-cap stocks with attractive long-term potential and one that could be stalling.
One Large-Cap Stock to Sell:
Keurig Dr Pepper (KDP)
Market Cap: $42.88 billion
Born out of a 2018 merger between Keurig Green Mountain and Dr Pepper Snapple, Keurig Dr Pepper (NASDAQ:KDP) is a consumer staples powerhouse boasting a portfolio of beverages including sodas, coffees, and juices.
Why Are We Cautious About KDP?
- Free cash flow margin didn’t grow over the last year
- ROIC of 5.7% reflects management’s challenges in identifying attractive investment opportunities
- High net-debt-to-EBITDA ratio of 5× could force the company to raise capital on unfavorable terms if market conditions deteriorate
At $31.50 per share, Keurig Dr Pepper trades at 12.5x forward P/E. If you’re considering KDP for your portfolio, see our FREE research report to learn more.
Two Large-Cap Stocks to Watch:
Cardinal Health (CAH)
Market Cap: $51.42 billion
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE:CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Could CAH Be a Winner?
- Dominant market position is represented by its $254.2 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
Cardinal Health’s stock price of $221.80 implies a valuation ratio of 18x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Hewlett Packard Enterprise (HPE)
Market Cap: $81.02 billion
Born from the 2015 split of the iconic Silicon Valley pioneer Hewlett-Packard, Hewlett Packard Enterprise (NYSE:HPE) provides edge-to-cloud technology solutions that help businesses capture, analyze, and act upon their data across hybrid IT environments.
Why Are We Bullish on HPE?
- ARR growth averaged 48.5% over the past two years, showing customers are willing to take multi-year bets on its offerings
- Dominant market position is represented by its $41.87 billion in revenue and gives it fixed cost leverage when sales grow
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 28.5% over the last two years outstripped its revenue performance
Hewlett Packard Enterprise is trading at $61.11 per share, or 13.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.