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.
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 three large-cap stocks whose competitive advantages create flywheel effects.
Paychex (PAYX)
Market Cap: $50.86 billion
One of the oldest service providers in the industry, Paychex (NASDAQ: PAYX) offers its customers payroll and HR software solutions.
Why Are We Positive On PAYX?
- Sales outlook for the upcoming 12 months calls for 17.5% growth, an acceleration from its three-year trend
- Highly efficient business model is illustrated by its impressive 39.6% operating margin
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Paychex is trading at $141.27 per share, or 7.8x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
TransDigm (TDG)
Market Cap: $78.31 billion
Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE: TDG) develops and manufactures components and systems for military and commercial aviation.
Why Should You Buy TDG?
- Average organic revenue growth of 13% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Additional sales over the last two years increased its profitability as the 24.9% annual growth in its earnings per share outpaced its revenue
- TDG 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
At $1,408 per share, TransDigm trades at 33.1x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Zoetis (ZTS)
Market Cap: $65.3 billion
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Why Does ZTS Stand Out?
- Constant currency growth averaged 8.6% over the past two years, showing it can expand globally regardless of the macroeconomic environment
- Strong free cash flow margin of 20.8% enables it to reinvest or return capital consistently
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Zoetis’s stock price of $146.50 implies a valuation ratio of 22.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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