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:
AIG (AIG)
Market Cap: $40.83 billion
With roots dating back to 1919 when it began as a small insurance agency in Shanghai, China, AIG (NYSE: AIG) is a global insurance organization that provides commercial and personal insurance solutions to businesses and individuals across more than 200 countries.
Why Do We Avoid AIG?
- 5.5% annual declines in net premiums earned for the past five years indicates policy sales struggled this cycle
- Earnings per share lagged its peers over the last two years as they only grew by 2.6% annually
- Products and services are facing profitability challenges during this cycle, as seen in its flat book value per share over the last five years
AIG is trading at $76.30 per share, or 0.9x forward P/B. If you’re considering AIG for your portfolio, see our FREE research report to learn more.
Two Large-Cap Stocks to Watch:
Parker-Hannifin (PH)
Market Cap: $122.9 billion
Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Is PH Interesting?
- Excellent operating margin of 18.5% highlights the efficiency of its business model, and its operating leverage amplified its profits over the last five years
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- PH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy
At $971.50 per share, Parker-Hannifin trades at 29.4x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Waters Corporation (WAT)
Market Cap: $30.55 billion
Founded in 1958 and pioneering innovations in laboratory analysis for over six decades, Waters (NYSE: WAT) develops and manufactures analytical instruments, software, and consumables for liquid chromatography, mass spectrometry, and thermal analysis used in scientific research and quality testing.
Why Are We Fans of WAT?
- Annual revenue growth of 37.9% over the last two years was superb and indicates its market share increased during this cycle
- Projected revenue growth of 11.2% for the next 12 months suggests its momentum from the last two years will persist
- ROIC punches in at 35.4%, illustrating management’s expertise in identifying profitable investments
Waters Corporation’s stock price of $306.17 implies a valuation ratio of 23.6x 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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
