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.
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 that still have big upside potential and one whose momentum may slow.
One Large-Cap Stock to Sell:
D.R. Horton (DHI)
Market Cap: $41.21 billion
One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.
Why Are We Out on DHI?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 3.6% declines over the past two years
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
- Waning returns on capital imply its previous profit engines are losing steam
D.R. Horton is trading at $148.94 per share, or 13.6x forward P/E. Read our free research report to see why you should think twice about including DHI in your portfolio.
Two Large-Cap Stocks to Watch:
Hershey (HSY)
Market Cap: $37.84 billion
Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE:HSY) is an iconic company known for its chocolate products.
Why Are We Fans of HSY?
- Highly efficient business model is illustrated by its impressive 18.2% operating margin
- HSY is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $187.97 per share, Hershey trades at 20.3x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Arthur J. Gallagher (AJG)
Market Cap: $66.55 billion
Founded in 1927 and operating in approximately 130 countries through direct operations and correspondent networks, Arthur J. Gallagher (NYSE:AJG) provides insurance brokerage, reinsurance, consulting, and third-party claims settlement services to businesses and individuals worldwide.
Why Should You Buy AJG?
- Annual revenue growth of 20% over the past two years was outstanding, reflecting market share gains this cycle
- Earnings per share have massively outperformed its peers over the last five years, increasing by 18.5% annually
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Arthur J. Gallagher’s stock price of $259.60 implies a valuation ratio of 18.3x forward P/E. Is now the right 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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.