Large-Cap Stocks Bring Stability to Your Portfolio

·7-min read

The market is increasingly unpredictable these days, at times moving up, more often moving down and in between, trading sideways as well.

But the macro data that keeps coming out is overwhelmingly positive. Not only that: earnings results show that companies are definitely coming around. And demand, which includes a lot of pent-up demand, is as strong as ever.

Most sectors are showing signs of recovery with only some transportation (particularly air carriers) and consumer discretionary (with the exception of leisure and recreation) that are still dealing with the adverse effects of the pandemic.

The idiosyncrasies of the market make it a good time to hunt for large cap stocks that might be too expensive at other times. Some still offer good growth opportunities, particularly coming off the pandemic lows and many, though not all also pay a dividend.

Overall, large caps bring stability to your portfolio because they don’t react as aggressively to news and other events. Dividends also generate a steady flow of income that usually increase over time. So ideally, the largest chunk of your portfolio (60-70%) should consist of these stocks.

Here are a few large-caps that you may want to check out, since they just reported stellar earnings results-

Under Armour, Inc. UAA

Headquartered in Baltimore, MD, Under Armour is one of the leading designers, marketers and distributors of sporting goods and lifestyle products including authentic athletic footwear, apparel and accessories for professionals in the United States and internationally.

The company reported March quarter earnings that beat the Zacks Consensus Estimate by 300.0% on revenue that beat by 11.8%. The company raised both revenue and earnings expectations for 2021. Revenue growth is now expected to be in the high-teens percentage rate versus earlier expectation of a high-single-digit increase. EPS is expected to go from 12-14 cents to 28-30 cents (up 16 cents at the mid-point).

Current estimates represent EPS growth of 176.9% this year and 94.6% in the next. However, even these estimates will prove conservative given the raised outlook.

The shares carry a Zacks Rank #2 (Buy) and have a Growth Score A. They belong to the Textile - Apparel industry (top 18% of Zacks-classified industries).

Bruker Corp. BRKR

Billerica, MA-headquartered Bruker designs and manufactures proprietary life science and materials research systems as well as associated products for life science research, pharmaceuticals, applied markets, nanotechnology, cell biology, clinical research, microbiology and in-vitro diagnostics customers.

The company reported March quarter earnings that beat the Zacks Consensus Estimate by 37.5% on revenue that beat by 0.6%. The company raised its expectations on 2021 revenue growth (by 4 percentage points), operating margin (by 60 bps) and EPS (by 10 cents).

Current estimates call for EPS growth of 31.1% this year and 14.5% in the next. However, these estimates might prove conservative given the raised outlook.

The shares carry a Zacks Rank #2 and have a Growth Score A. They belong to the Instruments – Scientific industry (top 26% of Zacks-classified industries).

DENTSPLY SIRONA Inc. XRAY

Headquartered in York, PA, DENTSPLY SIRONA is a global leader in the design, development, manufacture and marketing of dental consumables, laboratory products, specialty products, as well as dental implants and related scanning equipment, treatment software, orthodontic appliances, treatment centers, imaging equipment, and computer aided design and machining systems for dental practitioners. It also supplies other consumable medical device products like urology catheters, medical drills and other non-medical products.

The company reported March quarter earnings that beat the Zacks Consensus Estimate by 30.9% on revenue that beat by 10.5%. The company raised its expectations on revenue growth (by $0.05 billion) and EPS (by $1.25).

Current estimates represent EPS growth of 52.0% this year and 12.3% in the next. These estimates should go up given the raised outlook.

The shares carry a Zacks Rank #2 and have a Growth Score B. They belong to the Medical - Dental Supplies industry (top 35% of Zacks-classified industries).

ON Semiconductor Corp. ON

Phoenix, AZ-based ON Semiconductor is an original equipment manufacturer (OEM) of a broad range of discrete (eg. bipolar transistors, diodes, filters, FETs, rectifiers and thyristors) and embedded semiconductor components.

On has made a number of acquisitions including Fairchild Semiconductor, Cypress Semiconductor’s CMOS Image Sensor Business Unit, SANYO Semiconductor, AMI Semiconductor, Analog Devices’ power PC controller business, CMD, Catalyst and SoundDesign

that expanded its technical capabilities and product breadth, as well as margins and end-market exposure.

The company reported March quarter earnings that beat the Zacks Consensus Estimate by 2.9% on revenue that beat by 1.3%.

Current estimates represent EPS growth of 123.5% this year and 19.0% in the next. The estimate is up 9 cents since the company reported.

The shares carry a Zacks Rank #2 and have a Value Score B. They belong to the Semiconductor - Analog and Mixed industry (top 15% of Zacks-classified industries).

Volkswagen AG VWAGY

Volkswagen-ADR is the largest automobile manufacturer in Europe with products and services along the entire automotive value chain. With nine independent brands, they are able to offer a unique range of models from the extremely efficient 3-liter car to the great sporting tradition of Bentley. It also benefits from membership of the Volkswagen Group with its global manufacturing base.

The company reported March quarter earnings that beat the Zacks Consensus Estimate by 27.9% on revenue that beat by 12.8%. Operating return on sales is forecast at 5.5% to 7% this year, compared with the previous range of 5% to 6.5%.

Current estimates call for EPS growth of 64.1% this year and 11.3% in the next. The raised guidance will lead to an upward revision.

The shares carry a Zacks Rank #2 and have Value and Growth Scores of A. They belong to the Automotive – Foreign industry (top 42% of Zacks-classified industries).

Trane Technologies plc TT

Based in Swords, Ireland, Trane Technologies provides climate control solutions for buildings, homes and transportation.

The company reported March quarter earnings that beat the Zacks Consensus Estimate by 62.9% on revenue that beat by 5.0%. The company provided revenue and EPS guidance that surpassed current estimates.

Current estimates call for EPS growth of 22.9% this year and 12.8% in the next. 2021 EPS guidance of $6.00 is 58 cents above the Zacks Consensus Estimate of $5.48.

The shares carry a Zacks Rank #2 (Buy) and have a Growth Score A. They belong to the Technology Services industry (bottom 38% of Zacks-classified industries).

One-Month Price Performance

+1,500% Growth: One of 2021’s Most Exciting Investment Opportunities

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DENTSPLY SIRONA Inc. (XRAY) : Free Stock Analysis Report

Trane Technologies plc (TT) : Free Stock Analysis Report

ON Semiconductor Corporation (ON) : Free Stock Analysis Report

Bruker Corporation (BRKR) : Free Stock Analysis Report

Under Armour, Inc. (UAA) : Free Stock Analysis Report

Volkswagen AG (VWAGY) : Free Stock Analysis Report

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