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 are three large-cap stocks whose competitive advantages create flywheel effects.
Cadence (CDNS)
Market Cap: $87.46 billion
With the name chosen to reflect the idea of a repeating pattern or rhythm in electronic design, Cadence Design Systems (NASDAQ:CDNS) offers a software-as-a-service platform for semiconductor engineering and design.
Why Are We Fans of CDNS?
- Billings growth has averaged 24% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Software is difficult to replicate at scale and results in a best-in-class gross margin of 85.9%
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Cadence is trading at $320.80 per share, or 16.5x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Vertiv (VRT)
Market Cap: $48.12 billion
Formerly part of Emerson Electric, Vertiv (NYSE:VRT) manufactures and services infrastructure technology products for data centers and communication networks.
Why Should You Buy VRT?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 18.5% over the past two years
- Free cash flow margin expanded by 6.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Returns on capital are growing as management capitalizes on its market opportunities
At $126.15 per share, Vertiv trades at 33.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Ingersoll Rand (IR)
Market Cap: $35.04 billion
Started with the invention of the steam drill, Ingersoll Rand (NYSE:IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.
Why Does IR Stand Out?
- Operating margin expanded by 13 percentage points over the last five years as it scaled and became more efficient
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 18.4% annually, topping its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
Ingersoll Rand’s stock price of $86.84 implies a valuation ratio of 25.2x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. 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