"Too big to fail" is how we would describe the megacap stocks in this article today. While they will likely stand the test of time, it’s not all sunshine and rainbows as their scale can limit their ability to find new sources of growth.

Sound complicated? With StockStory, it doesn’t have to be. Our job is to find you high-quality companies that can win regardless of the conditions. That said, here are two industry titans with attractive long-term potential and one whose momentum may slow.

One Mega-Cap Stock to Sell:

IBM (IBM)

Market Cap: $226.6 billion

With a corporate history spanning over a century and once known for its iconic mainframe computers, IBM (NYSE: IBM) provides hybrid cloud computing platforms, AI solutions, consulting services, and enterprise infrastructure to help businesses modernize their operations.

Why Do We Steer Clear of IBM?

1. Sales tumbled by 1.3% annually over the last five years, showing market trends are working against its favor during this cycle
2. Flat earnings per share over the last five years lagged its peers
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

IBM is trading at $248.88 per share, or 22.8x forward P/E. Read our free research report to see why you should think twice about including IBM in your portfolio.

Two Mega-Cap Stocks to Watch:

Procter & Gamble (PG)

Market Cap: $372.4 billion

Founded by candle maker William Procter and soap maker James Gamble, Proctor & Gamble (NYSE: PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.

Why Is PG Interesting?

1. Customer loyalty and massive revenue base of $83.93 billion makes it a household name that influences purchasing decisions
2. Excellent operating margin of 25.2% highlights the efficiency of its business model
3. Strong free cash flow margin of 18.6% enables it to reinvest or return capital consistently

Procter & Gamble’s stock price of $158.76 implies a valuation ratio of 22.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Eli Lilly (LLY)

Market Cap: $737.5 billion

Founded in 1876 by a Civil War veteran and pharmacist who was frustrated with the poor quality of medicines available at the time, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.

Why Are We Bullish on LLY?

1. Annual revenue growth of 33% over the last two years was superb and indicates its market share increased during this cycle
2. Share repurchases over the last five years enabled its annual earnings per share growth of 17.6% to outpace its revenue gains
3. Industry-leading 25.8% return on capital demonstrates management’s skill in finding high-return investments

At $821.05 per share, Eli Lilly trades at 32.4x forward P/E. Is now the right time to buy? Find out in our full 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 Axon (+711% five-year return). Find your next big winner with StockStory today for free.