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 is one large-cap stock that still has big upside potential and two whose momentum may slow.
Two Large-Cap Stocks to Sell:
Pfizer (PFE)
Market Cap: $136.7 billion
With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE: PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.
Why Does PFE Worry Us?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin dropped by 17.4 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Diminishing returns on capital suggest its earlier profit pools are drying up
Pfizer is trading at $24.12 per share, or 8.3x forward P/E. If you’re considering PFE for your portfolio, see our FREE research report to learn more.
Truist Financial (TFC)
Market Cap: $58.51 billion
Born from the 2019 merger of BB&T and SunTrust in one of the largest banking combinations since the 2008 financial crisis, Truist Financial (NYSE: TFC) is a bank holding company that offers a wide range of financial services including consumer and commercial banking, wealth management, insurance, and lending solutions.
Why Are We Wary of TFC?
- Loans are facing end-market challenges during this cycle, as seen in its flat net interest income over the last five years
- Net interest margin of 3% reflects its high servicing and capital costs
- Earnings per share fell by 1.2% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
At $45.69 per share, Truist Financial trades at 1x forward P/B. Dive into our free research report to see why there are better opportunities than TFC.
One Large-Cap Stock to Buy:
DexCom (DXCM)
Market Cap: $29.98 billion
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Is DXCM a Top Pick?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 17.8% over the past two years
- Earnings per share have massively outperformed its peers over the last five years, increasing by 17.5% annually
- Free cash flow margin expanded by 8.6 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
DexCom’s stock price of $76.60 implies a valuation ratio of 32.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Growth Stocks for this month. 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 Comfort Systems (+782% 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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