The 3 Best Large-Cap Stocks to Buy Now: September 2023
Although high-flying tech startups offer far greater upside potential, for those interested in playing the long game, the best large-cap stocks may be your ticket to sustained success. To be fair, companies commanding gargantuan market capitalization tend to feature mature and thus slow-rising businesses. However, faced with broader uncertainties, going the established route may be the ideal maneuver.
Federal Reserve Chair Jerome Powell’s basic monetary policy game plan benefits the best large-cap stocks over smaller enterprises. Although he didn’t provide specific guidance, Powell acknowledged that inflation remains stubbornly high. Therefore, interest rate hikes may materialize, quashing near-term hopes of an accommodative policy.
That’s not great for growth-oriented startups. However, for the well-established entities, it could be their turn to shine. Let’s take a closer look at the best large-cap stocks to buy now.
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Marathon Petroleum (MPC)
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A petroleum refining, marketing, and transportation company, Marathon Petroleum (NYSE:MPC) offers one of the most relevant takes among best large-cap stocks.
Sure, the broader pivot to electric vehicles presents a long-term headwind for midstream and downstream enterprises like Marathon. Yet, the economic pressures of the moment prevent large-scale adoption, particularly for the lower-to-middle-income crowd.
Put another way, Marathon stands to be relevant, perhaps for several years to come. Even better, from a financial perspective, MPC easily qualifies as one of the best large-cap stocks to buy now. For example, its three-year revenue growth rate (per-share basis) comes in at 27.1%, above 80.73% of its peers. Yet MPC trades at a lowly trailing-year sales multiple of 0.43X.
If that isn’t enticing enough, MPC also trades at a forward earnings multiple of 6.83X. In contrast, the sector median comes in at 8.35X.
Finally, analysts peg MPC as a moderate “buy”. The high-side price target of $164 implies growth of over 12%.
Femsa (FMX)
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Technically known as Fomento Economico Mexicano SAB, Femsa (NYSE:FMX) is a multinational beverage and retail company headquartered in Monterrey, Mexico. Per its public profile, the enterprise represents the largest independent Coca-Cola (NYSE:KO) bottling group in the world. It also owns the largest convenience store chain in Mexico.
Given the exciting (albeit speculative) growth opportunities in the wider Latin America ecosystem, FMX ranks among the best large-cap stocks. Further, Femsa is a beneficiary of the trade-down effect. Under difficult circumstances, people globally cut down their expenditures of expensive discretionary items. However, the products of Femsa are relatively cheap and widely accessible.
Financially, Femsa generates strong growth, with sales expanding 53.7% over the past three years. At the same time, the price paid for growth is only 1.36X, lower than the sector median 1.81X. Lastly, analysts peg FMX a moderate “buy” with a $127.75 average price target, implying roughly 15% growth.
Nutrien (NTR)
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Canadian-based Nutrien (NYSE:NTR) is a fertilizer company. Per its public profile, it’s the world’s largest producer of potash and the third-largest producer of nitrogen fertilizer. However, the impact to the global food commodities supply chain has not been kind to NTR. Since the start of the year, shares slipped almost 10%. In the past 365 days, they’re down nearly 29%.
However, Nutrien arguably makes a case for best large-cap stocks to buy because of its underlying relevance. No matter what, people need to eat. Further, last year’s geopolitical flashpoint sent a clear message that Western nations must take food security seriously. Over time, this framework should benefit Nutrien.
For now, investors can take confidence in its three-year revenue growth rate of 28.1%. In addition, Nutrien is consistently profitable, leveraging a trailing-year net margin of 11.07%. In closing, analysts peg NTR a moderate “buy” with a $74.73 price target, implying nearly 16% upside potential.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.
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