
1 Large-Cap Stock with Exciting Potential and 2 to Approach with Caution
Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.
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 existing offerings may be tapped out.
Two Large-Cap Stocks to Sell:
Marriott (MAR)
Market Cap: $64.27 billion
Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ:MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.
Why Is MAR Not Exciting?
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Weak revenue per room over the past two years indicates challenges in maintaining pricing power and occupancy rates
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Estimated sales growth of 4.3% for the next 12 months implies demand will slow from its two-year trend
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Earnings growth over the last five years fell short of the peer group average as its EPS only increased by 9.2% annually
At $222.58 per share, Marriott trades at 21.8x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than MAR .
CBRE (CBRE)
Market Cap: $35.85 billion
Established in 1906, CBRE (NYSE:CBRE) is one of the largest commercial real estate services firms in the world.
Why Do We Avoid CBRE?
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Sizable revenue base leads to growth challenges as its 7.7% annual revenue increases over the last two years fell short of other consumer discretionary companies
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Operating margin of 3.7% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
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Poor free cash flow margin of 2.3% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
CBRE is trading at $115.75 per share, or 20.2x forward price-to-earnings. Read our free research report to see why you should think twice about including CBRE in your portfolio, it’s free .
One Large-Cap Stock to Buy:
Monster (MNST)
Market Cap: $56.69 billion
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Why Are We Backing MNST?
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Healthy operating margin of 27% shows it’s a well-run company with efficient processes
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MNST is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy
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Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures