Investing

Seeking Stability? 3 Top-Ranked Large-Caps to Buy

Derek Lewis

Published: July 27, 2023 10:49 pm

Large-cap stocks are found in almost every portfolio. They are well-established, have more analyst coverage, and frequently pay dividends, all undeniably significant benefits that make them so popular among investors.

Of course, their steady nature may not appeal to all, with some preferring small-caps’ explosive growth characteristics. However, the decreased volatility large-caps possess is well worth the trade-off in the eyes of more conservative investors.

For those seeking large-cap exposure, three stocks – Caterpillar CAT, PPG Industries PPG, and JPMorgan Chase & Co. JPM – have all seen their near-term outlooks shift positively. Let’s take a closer look at a few characteristics of each.

Caterpillar

Caterpillar, the world’s leading manufacturer of construction and mining equipment, has enjoyed positive earnings estimate revisions, helping land the stock into a favorable Zacks Rank #2 (Buy).

The revisions trend has been particularly noteworthy for its current fiscal year, with the $17.87 per share estimate up 25% since July of 2022.

Shares aren’t stretched regarding valuation, with the current 14.7X forward earnings multiple sitting beneath the 15.9X five-year median and highs of 21.4X in 2022. It’s worth noting that the company is forecasted to enjoy 30% earnings growth on 10% higher revenues in its current year, making the current valuation much more attractive.

And to top it off, Caterpillar is a member of the Dividend Aristocrats club, showing a notable commitment to shareholders through at least 25+ years of increased payouts. CAT shares currently yield 2% annually paired with a sustainable 30% payout ratio.

PPG Industries

PPG’s earnings outlook has shifted nicely higher across all timeframes, landing the stock into a Zacks Rank #2 (Buy). Revisions keep climbing higher.

Like CAT, PPG Industries has historically shown a commitment to increasingly rewarding its shareholders, recently joining the elite Dividend King club. Shares currently yield a solid 1.7% annually, with the payout growing by nearly 7% over the last five years.

While the company’s next quarterly release is scheduled for October 18^th, it’s worth noting that analysts have become notably bullish for the release already, with the $1.94 per share estimate up nearly 5% since the beginning of July.

JPMorgan

Financial titan JPMorgan helped kick off earnings season positively, exceeding the Zacks Consensus EPS Estimate by more than 20% and delivering a sizable 11% revenue beat. Earnings saw growth of 58% year-over-year, whereas revenue grew 35%.

And to little surprise, analysts have been bullish across the board for the financial titan. The stock is a Zacks Rank #1 (Strong Buy).

And like those above, JPM rewards its shareholders via its annual dividend that currently yields 2.6%. Dividend growth is there, too, with the payout growing by 8% just over the last five years.

Bottom Line

Large caps are a common staple in every portfolio, as their stable nature paired with a successful track record is impossible to ignore.

And for those seeking large-caps with a history of successful business operations, all three above – Caterpillar CAT, PPG Industries PPG, and JPMorgan Chase & Co. JPM – have seen their earnings outlooks shift positively.

JPMorgan Chase & Co. (JPM): Free Stock Analysis Report

Caterpillar Inc. (CAT): Free Stock Analysis Report

PPG Industries, Inc. (PPG): Free Stock Analysis Report

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