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 is one large-cap stock that still has big upside potential and two that could be stalling.
Market Cap: $89.69 billion
Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE:ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.
Why Do We Think Twice About ICE?
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Annual earnings per share growth of 9.3% underperformed its revenue over the last five years, showing its incremental sales were less profitable
Intercontinental Exchange’s stock price of $157.08 implies a valuation ratio of 21.6x forward P/E. Dive into our free research report to see why there are better opportunities than ICE.
Market Cap: $57.82 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 Wary of AFL?
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Net premiums earned contracted by 6.2% annually over the last five years, showing unfavorable market dynamics this cycle
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Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 9.4% annually
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Capital strength will likely plateau over the next 12 months as Wall Street expects flat book value per share
Aflac is trading at $110.12 per share, or 2x forward P/B. Check out our free in-depth research report to learn more about why AFL doesn’t pass our bar.
Market Cap: $69.32 billion
A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.
Why Are We Bullish on PWR?
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Sales pipeline is in good shape as its backlog averaged 16.7% growth over the past two years
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Forecasted revenue growth of 12.8% for the next 12 months indicates its momentum over the last two years is sustainable
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Earnings per share have massively outperformed its peers over the last two years, increasing by 24.3% annually
