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 is one large-cap stock whose competitive advantages creates flywheel effects and two whose momentum may slow.

Two Large-Cap Stocks to Sell:

Parker-Hannifin (PH)

Market Cap: $92.42 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 Does PH Worry Us?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Estimated sales growth of 2% for the next 12 months implies demand will slow from its two-year trend
3. 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Parker-Hannifin’s stock price of $723.26 implies a valuation ratio of 25.4x forward P/E. Dive into our free research report to see why there are better opportunities than PH.

Aflac (AFL)

Market Cap: $54.83 billion

Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.

Why Are We Hesitant About AFL?

1. Annual net premiums earned declines of 7.8% for the past four years show its policy sales struggled during this cycle
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.4%
3. Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 15% annually

Aflac is trading at $101.42 per share, or 2.1x forward P/B. Check out our free in-depth research report to learn more about why AFL doesn’t pass our bar.

One Large-Cap Stock to Watch:

Wabtec (WAB)

Market Cap: $36.4 billion

Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE: WAB) provides equipment, systems, and related software for the railway industry.

Why Do We Like WAB?

1. Average organic revenue growth of 9.5% over the past two years demonstrates its ability to expand independently without relying on acquisitions
2. Operating margin improvement of 6.3 percentage points over the last five years demonstrates its ability to scale efficiently
3. Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue

At $212.70 per share, Wabtec trades at 24.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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