Large cap stocks are always great to have in a portfolio. These companies are among the largest and most well-known stocks on the market. That makes finding the best large-cap stocks a worthy exercise.
Of course, in this market it can be challenging to identify the best large cap stocks. With the Dow Jones Industrial Average down more than 16% and other major indices down more than that, you just can’t throw darts at a board to find your winners.
For this list, I use my exclusive Portfolio Grader tool to find the best large cap stocks to buy and hold.
The Portfolio Grader grades stocks based on fundamental factors such as revenue growth and operating margin. And the buying pressure factors and other quantitative factors that help predict a stock’s future performance.
Here are seven large-cap stocks to buy and hold that get strong ratings from the Portfolio Grader.
Elevance Health (ELV)
Formerly known as Hymn, Elevation Health (NYSE:ELV) is the largest for-profit company offering health insurance under the Blue Cross Blue Shield brand. All in all, it is one of the top-rated large-cap stocks for long-term investing.
While still moving higher as the market pulls back, ELV stock is trading at a favorable valuation (15x future earnings). It can easily maintain this earnings multiple as it is expected to grow its earnings per share by about 12.8% next year and by about 13.6% in 2024.
Elevance could continue to rise along with increased EPS. The current term yield of 1.05% may seem small, but over time it can become huge. The low payout ratio (15.7%) leaves plenty of room for dividend growth.
This stock deserves an “A” rating in my Portfolio Grader.
With approximately 10,500 shops and clubs around the world, walmart (NYSE:WMT) is one of the largest retailers in the world. It is one of the most successful.
WMT stock is down about 7% year over year. That’s nothing to get excited about until you consider that competitor Target (NYSE:TGT) is down 32% so far this year. Walmart’s largest e-commerce competitor, Amazon (NASDAQ:AMZN) is down 33% year over year.
After a rough first quarter in which Walmart both fell short of expectations and lowered its full-year expectations, Walmart is enjoying a slight revival. Second quarter results were better than expected, beating expectations on both the top and bottom lines.
Walmart confirmed its outlook for the rest of the year, which should give investors some confidence.
Walmart stock has a “B” rating in the Portfolio Grader.
If you want to talk about a large cap stock to buy and hold, they don’t get much bigger than Apple (NASDAQ:AAPL), with a market cap of $2.3 trillion.
The smartphone maker recently rolled out its iPhone 14 — smartly priced at an affordable $799 — as well as new versions of its Airpods Pro and Apple Watch.
Apple is a great stock because it’s a great company that continues to make products that are in high demand.
Apple has a share of more than 55% of the US smartphone market. The annual rollout of upgraded smartphones and other products has become a must-watch event for Wall Street and Apple fans alike.
Admittedly, AAPL shares have been a disappointment so far this year, down nearly 19% in 2022, but the company is credibly doing its best to manage expectations.
Raytheon Technologies (RTX)
Defense company Raytheon Technologies (NYSE:RTX) is having a solid year in the scheme of things.
While most of the market is in the red, defense conglomerates like Raytheon manage to hold their own — and even gain a little in share price.
Raytheon, the parent company of Collins Aerospace and Pratt & Whitney, is a missile and defense manufacturer.
It worked with Lockheed Martin (NYSE:LMT) to create Javelin anti-tank missiles that Ukraine uses to defend against Russian forces. It also makes the Stinger anti-aircraft missiles Ukraine is using in the conflict.
The need for military equipment is high – and likely to keep contractors like Raytheon busy.
Qualcomm (NASDAQ:QCOM) is in an enviable position as the country transitions to 5G technology.
Qualcomm actually owns several patents that are critical to manufacturing semiconductors that enable 5G wireless technology.
The fifth-generation mobile network is a great place to invest. It offers higher multi-gigabit peak data rates and better reliability to give mobile users the same streaming experience as someone using an ultra-fast wired connection.
That has many great uses, including for the growth of smart cities, improved streaming video, better virtual meetings and medical appointments, and even improved experiences for virtual reality, sports betting and gaming.
QCOM stock is killing it in its earnings reports. For the third quarter, revenue of $10.93 billion beat expectations of $10.85 billion, and earnings per share of $2.96 beat expectations at $2.87.
QCOM shares have a bright future and are rated “B” in the Portfolio Grader.
Mercado Libre (MELI)
When you think about MercadoLibre (NASDAQ:MELI), you can probably think of Amazon, but in Latin America.
MercadoLibre operates the largest e-commerce and digital payment systems in Latin America, operating in 18 countries. The platforms include Mercado Libre, Mercado Pago (a digital payment platform) and a Mercado credit service.
Like Amazon, MercadoLibre has had a rough 2022, with it down nearly 40%. Even factoring in those losses, MELI stock has a five-year growth rate of 248%, which is much better than AMZN stock’s 138% growth over the same period.
Now that the share price has fallen sharply, but the income continues to pour in, MELI looks like an attractive purchase. It has a “B” rating in the Portfolio Grader.
Johnson & Johnson (JNJ)
Founded in 1886, Johnson & Johnson (NYSE:JNJ) makes consumer packaged goods, pharmaceuticals, medical devices and more.
All of these products are must-haves for consumers – meaning that even when inflation rises and free income is under pressure, people should buy JNJ products first. And that’s just one reason why JNJ, with a market cap of $441 billion, is outperforming the market. JNJ is down just 2% in 2022.
Revenues are also solid, with revenue of $23.79 billion in the third quarter, beating analyst expectations of $23.43 billion. Earnings per share of $2.55 were 6 cents per share better than analysts’ expectations.
In addition, JNJ offers a solid dividend yield of 2.7%. That helps push JNJ to a “B” rating in the Portfolio Grader.
As of the date of publication, the InvestorPlace Research Staff member primarily responsible for this article owned AAPL stock.
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