Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
This is precisely where StockStory comes in - our job is to find you high-quality companies that can win regardless of the conditions. Keeping that in mind, here are two large-cap stocks whose competitive advantages create flywheel effects and one whose momentum may slow.
One Large-Cap Stock to Sell:
Hilton (HLT)
Market Cap: $56.8 billion
Founded in 1919, Hilton Worldwide (NYSE: HLT) is a global hospitality company with a portfolio of hotel brands.
Why Are We Wary of HLT?
- Annual sales growth of 4.3% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Weak revenue per room over the past two years indicates challenges in maintaining pricing power and occupancy rates
- Estimated sales growth of 7% for the next 12 months implies demand will slow from its two-year trend
Hilton is trading at $238.96 per share, or 29.3x forward P/E. Read our free research report to see why you should think twice about including HLT in your portfolio.
Two Large-Cap Stocks to Watch:
Sea (SE)
Market Cap: $84.36 billion
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Are We Backing SE?
- Monetization efforts are paying off as its average revenue per user has grown by 20.8% annually over the last two years
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 38.5% over the last three years outstripped its revenue performance
- Free cash flow margin jumped by 17.3 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $142.79 per share, Sea trades at 26.6x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Colgate-Palmolive (CL)
Market Cap: $73.54 billion
Formed after the 1928 combination between toothpaste maker Colgate and soap maker Palmolive-Peet, Colgate-Palmolive (NYSE: CL) is a consumer products company that focuses on personal, household, and pet products.
Why Do We Like CL?
- Large revenue base of $19.95 billion and strong customer awareness make retailers more likely to stock its products
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
- Industry-leading 39.7% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets
Colgate-Palmolive’s stock price of $90.74 implies a valuation ratio of 24.1x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
