The five best large-cap stocks you can buy today

 

With the markets trading near record highs, investors are starting to think about preserving some of their recent gains.

One way to accomplish this would be to liquidate all your holdings and sit on cash for a while. This accomplishes the goal of preventing any market losses, but is this is the wisest move? Absolutely not! The market is strong enough that you want to keep your money working, but you should make sure your money is working in the right places.

The idea of a “safe” investment in the stock market is just an illusion. There are no guarantees when it comes to the market, as just one piece of negative news could literally sink even the strongest and most steadfast securities.

Investing is about risk. There is no denying that, but while you have to be wiling to assume some level of risk, there are ways to limit the risk you assume. One way to limit your risk is by investing in solid large cap stocks.

It takes a strong company to rise in the ranks to the large-cap stock universe. Companies that have managed to grow in size to market caps in excess of $10 billion have proven an ability to lead and to adapt to changing market conditions.

Their size also provides a level of stability that smaller companies do not enjoy.

If you are concerned that a market sell could be in the making, consider setting up positions in the following large cap stocks to build a little safety in your portfolio.

Lockheed Martin

Defense contractor Lockheed Martin (LMT) is a large cap stock with an $83.9 billion market cap. The stock has performed great over the last year, as Wall Street rallied into the sector in expectation of increased federal spending on the military after President Trump’s surprising election victory. As tensions continue to mount around the globe, the defense sector remains a great bet moving forward. The stock has a P/E of 16.8, and earnings are forecast to rise 12.8% during the year. In addition, the stock has a 2.5% dividend yield.

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Chart courtesy of www.stockcharts.com

Facebook

Social media giant Facebook (FB) is a relatively new stock, but its market dominance cannot be overstated. The company has emerged as the clear winner in social media, and it was the first company to really solve the riddle on how to monetize large amounts of mobile users. The stock has a market cap of $467 billion, which is rather phenomenal considering how young the company is. Facebook changed the way the world communicates, and as it continues to grow the stock should continue to build on recent gains. As of its last quarterly report, the company boasted a massive 1.94 billion active monthly users. The stock has a high valuation, with a P/E of 41, but considering that analysts expect earnings growth of 15.1% this year, and 23.8% next year, the valuation is acceptable. Wall Street loves to see growth, and as long as Facebook is able to live up to its lofty growth estimates the stock will remain strong.

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Chart courtesy of www.stockcharts.com

Home Depot

The strong housing market has worked in the favor of home improvement retailers such as Home Depot (HD). Home Depot caters to both homebuilders as well as homeowners, and with the housing market as strong as it is, and expected to remain, the outlook remains bright for the company. There is a major housing shortage in the nation which will keep strength in the housing market despite rising interest rates, and should keep home prices moving in the right direction. As home prices rise, current homeowners are more willing to invest in repairs and updates to their homes, which is a major reason why earnings growth has been so strong for Home Depot. Over the last five years, the company has grown earnings by 18.9% per annum, and analysts expect average annual earnings growth of 12.2% over the next five years. The stock has a P/E of 22.8, which is fine considering the strong growth estimates, and the stock currently offers a 2.33% dividend yield.

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Chart courtesy of www.stockcharts.com

Honeywell Int’l

Honeywell Int’l (HON) manufactures diversified machinery that is used in a variety of sectors including aerospace, home and building, and the automotive market. Improvements in the overall economy have resulted in strong growth for the $102.9 billion market cap company. Over the last five years, the company has grown earnings by 9.67%, and the street sees the company growing earnings by 7.0% on average over the next five years. The stock has a reasonable valuation, with a P/E of 21.2, so there is still plenty of upside despite the stock hitting a record high in June. The stock also offers a 1.96% dividend yield.

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Chart courtesy of www.stockcharts.com

Visa

Visa (V) shares have been steadily rising over the last six months, and the stock is currently trading just pennies below its all-time high. With the stock’s recent rally, its market cap has risen to $224.79 billion. As recent earnings have proven, consumers are definitely spending, and a great deal of purchases are being made online. This is the perfect scenario for Visa, since it will handle a huge portion of the transactions online. The company has grown earnings by 16.4% on average over the last five years, and analysts forecast annual earnings growth of 17.0% over the next five years. The stock offers a 0.68% dividend yield.

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Chart courtesy of www.stockcharts.com

Symbols: FB HD HON LMT V
Michael Fowlkes

Michael Fowlkes

Michael Fowlkes is a financial writer who has been with the Fresh Brewed Media family since 2004. Over the course of his tenure with Fresh Brewed Media, he has worn many hats, including portfolio manager, options analyst, and writer. Michael received his undergraduate degree from Virginia Tech in Accounting and got his start in finance working as a stock trader for six years at Chase Investment Counsel in Charlottesville, Va.

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