Large-cap stocks have always been a favorite among investors due to their stability and proven track record. Although not as explosive as small-caps, they are tailor-made for conservative investors seeking dividends and solid growth. Nevertheless, large-caps like Target TGT, Cardinal Health CAH, and Arista Networks ANET are defying the odds with their promising growth prospects.
Arista Networks
Arista Networks, a Zacks Rank #2 (Buy), has been riding the wave of the AI frenzy. The company’s provision of network switches to hyperscalers has enabled it to facilitate faster communication between computer servers. As a result, earnings estimates for the current fiscal year indicate a staggering 43% growth in earnings and a 33% surge in sales. The growth trajectory is expected to continue in FY24, with estimates pointing to an additional 10% earnings boost and an 11% revenue climb. Arista Networks’ performance is undeniably commendable in the current market landscape.
Target
Target, which has transformed from a traditional brick-and-mortar retailer to an omni-channel entity, has been awarded a Zacks Rank #2 (Buy). The company’s earnings estimates are on an upward trajectory, with a 40% growth expectation for the current fiscal year. Furthermore, Target offers a compelling dividend yield of 3.1% and has been consistently rewarding shareholders with a remarkable 15% five-year annualized dividend growth rate.
Cardinal Health
Cardinal Health, a Zacks Rank #2 (Buy), is a prominent nationwide drug distributor and service provider to pharmacies, healthcare providers, and manufacturers. This large-cap stock is showing robust growth potential, with consensus expectations indicating a 20% earnings growth and a 10% rise in sales for the current year. Looking ahead to FY25, estimates suggest an additional 12% earnings surge accompanied by an 8% revenue climb. Notably, Cardinal Health has impressively surpassed earnings and revenue expectations in its last five releases, solidifying its position as a strong earnings performer.
Bottom Line
Large caps, due to their stable nature and successful track records, are indispensable components of nearly every portfolio. For investors seeking large-cap exposure, the compelling growth outlooks of Target TGT, Cardinal Health CAH, and Arista Networks ANET make them worthy considerations. These stocks defy the traditional large-cap stereotype, offering substantial growth potential.
