2 Large-Cap Stocks for Long-Term Investors and 1 We Avoid

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.

This is precisely where StockStory comes in – our job is to find you high-quality companies that can win regardless of the conditions. That said, here are two large-cap stocks with attractive long-term potential and one that could be stalling.

Market Cap: $43.39 billion

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.

Why Should You Sell DHI?

1. Sales pipeline suggests its future revenue growth won’t meet our standards as its backlog averaged 13.9% declines over the past two years

2. Earnings per share have dipped by 11% annually over the past two years, which is concerning because stock prices follow EPS over the long term

3. Diminishing returns on capital suggest its earlier profit pools are drying up

D.R. Horton’s stock price of $150.27 implies a valuation ratio of 14x forward P/E. Read our free research report to see why you should think twice about including DHI in your portfolio, it’s free.

Market Cap: $38.41 billion

Starting as a single salvage yard in California in 1982, Copart (NASDAQ:CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.

Why Are We Backing CPRT?

1. Annual revenue growth of 15.7% over the past five years was outstanding, reflecting market share gains this cycle

2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 19.3% annually, topping its revenue gains

3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy

Copart is trading at $39.86 per share, or 24.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Market Cap: $63.03 billion

Founded in 1927 and operating in approximately 130 countries through direct operations and correspondent networks, Arthur J. Gallagher (NYSE:AJG) provides insurance brokerage, reinsurance, consulting, and third-party claims settlement services to businesses and individuals worldwide.

Why Will AJG Outperform?

1. Impressive 17.9% annual revenue growth over the last two years indicates it’s winning market share this cycle

2. Earnings per share grew by 17.7% annually over the last five years and trumped its peers

3. AJG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $242.50 per share, Arthur J. Gallagher trades at 18.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

The market’s up big this year – but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking – and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.