7 Top-Rated Large-Cap Stocks to Buy and Hold

InvestorPlace2022-12-17 09:06

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These are some blue-chip names with blue-chip potential

The best large-cap stocks to buy and hold are always a great addition to a portfolio.Exxon Mobil (XOM): The multinational oil and gas company has a plan to double its 2019 earnings by 2027.Eli Lilly (LLY): Eli Lilly drugs will be in demand for years, and its commitment to research and development will keep the pipeline full of products.Chevron (CVX) It’s investing billions of dollars into greener technologies that should help the company prosper if and when the world gets past its overdependency of fossil fuels.AbbVie (ABBV): AbbVie is in a great position to replace its revenue from Humira with two promising products.Merck (MRK): Best known for its cancer drug, Merck and its shareholders will enjoy profits from Keytruda exclusivity for another six years.Lockheed Martin (LMT): Its missiles are used in the highly regarded Patriot missile defense systems that appear headed to Ukraine.Bristol-Myers Squibb (BMY): With multiple drugs that bring in more than $1 billion in revenue, Bristol-Myers is in a good position for continued profitability.

The best large-cap stocks to buy and hold are always a great addition to a portfolio.

These companies are some of the biggest and best-known stocks in the market. That makes finding the best large-cap stocks a worthy exercise.

Of course, in this market, it can be a challenge to identify the best large-cap stocks to buy and hold. Despite its recent rally, the Dow Jones Industrial Average is still down more than 6% on the year and other major indices are down more than that. So, you just can’t throw darts at a board to find your winners.

For this list, I use my Portfolio Grader exclusive tool to find the best large-cap stocks to buy and hold.

The Portfolio Grader assigns stocks a letter grade based on fundamentals such as sales growth and operating margin. It factors in buying pressure and other quantitative factors that help predict a stock’s future performance.

Exxon Mobil

Exxon Mobil boasts a market capitalization of more than $430 billion.

The multinational oil and gas company has been raking in profits this year as oil prices remain high and the conflict in Ukraine keeps nations jittery about the energy supply. This makes it one of the best large-cap stocks to buy and hold for continued growth.

Exxon has laid out plans to hold its capital spending to between $20 billion and $25 billion annually, helping earnings by 2027 to double what they were in 2019. That bodes well for income investors, as Exxon plans to use its increased earnings for dividends and share repurchases.

And if $25 billion annually in capital spending sounds like a lot, consider that Exxon brought in $112.07 billion in revenue just in the third quarter. Earnings per share of $4.45 topped analysts’ expectations of $3.81.

XOM stock is up  74% in 2022 and has an “A” rating in thePortfolio Grader.

Eli Lilly

There are somegreat reasonsto invest in Eli Lilly – the finances, the great dividend or the company’s consistent performance.

But you should also keep in mind that Eli Lilly is a great pharmaceutical company with a vast pipeline of drugs, including tirzepatide to treat obesity and Mounjaro for its treatment of Type 2 diabetes, and that’s just the tip of the iceberg.

Eli Lilly drugs will be in demand for years, and its commitment to research and development will keep the pipeline full of products.

Eli Lilly reported revenue in the third quarter of $6.94 billion on earnings of $1.98 per share, both topping estimates of $6.91 billion and EPS of $1.94. The stock price is up nearly 30% on the  year.

Eli Lilly has a market capitalization of $351 billion and the stock offers a dividend yield of 1.3%. It has an “A” rating in thePortfolio Graderand easily is one of the large-cap stocks to buy and hold.

Chevron

Chevron stock has had a great year. So far, it’s up by 46%.

Meanwhile, Chevron is investing billions of dollars intobiofuelsand carbon capture – greener technologies that should help the company prosper if and when the world gets past its overdependency of fossil fuels.

Chevron brought in $66.64 billion in revenue in the third quarter, topping analysts’ expectations for $60.98 billion. Earnings per share was also a pleasant surprise at $5.56, while analysts had expected $4.92 per share.

Chevron has a market capitalization of $335 billion and also provides a dividend yield of 5.7%. It has an “A” in thePortfolio Graderand is one of the large-cap stocks to buy and hold worth keeping your eye on.

AbbVie

Illinois-based AbbVie is heading into the last two weeks of the year armed with a flurry of regulatory victories, astrong drug pipelineand the acquisition of DJS Antibodies, which will help bolster the company’s immunology portfolio.

What’s not to like about that?

True, AbbVie lost exclusivity for its vaunted Humira rheumatoid arthritis drug, but analysts are expecting itsSkyrizi and Rinvoq drugs to replace Humira’s revenue.

The two drugs should generate more than $15 billion in annual revenue by 2025 – and that would be more than Humira in its best days. Skyrizi treats moderate-to-severe plaque psoriasis and psoriatic arthritis, while Rinvoq treats severe rheumatoid arthritis.

Third-quarter earnings of $14.81 billion just missed expectations for $14.94 billion, but AbbVie still managed to top EPS estimates of $3.57 by posting $3.66 per share.

With a market capitalization of $291 billion and a 21% gain in 2022, ABBV stock has an “A” rating in the Portfolio Grader.

Merck

Merck is best known for its Keyruda cancer drug, for which it has six more years of exclusivity.

Keytruda accounted for more than a third of the company’s $14.96 billion in revenue in the third quarter.

Merck also makes Gardasil and Gardasil 9, which is a vaccine that’s used to prevent human papillomavirus, or HPV.

Merck regularly beats analysts’ expectations in its quarterly earnings, and Q3 was no different. In addition to the revenue post that beat estimates of $14.04 billion, Merck’s EPS of $1.85 was 14 cents better than expectations.

Merck stock is up more than 44% on the year and has an “A” rating in the Portfolio Grader.

Lockheed Martin

World-renowned as a top defense contractor, Lockheed Martin(LMT) has a market cap of $126 billion. It makes armored vehicles, assault weapons, missile systems and military aircraft, including the F-16 ,. F-22 and F-35 fighters and Black Hawk helicopters.

It also makes the missiles used inPatriot missile-defense systems, which the U.S. may supply to Ukraine to help its defense against Russia.

The company brought in $16.58 billion in revenue in  the third quarter – narrowly missing analysts’ estimates. But its net income of $1.78 billion was a cool 190% better than a  year ago.

Lockheed is assured of continued growth, particularly as the U.S. continues to remain on guard from unfriendly countries such as Iran, China, Russia and North Korea. With a dividend yield of 2.5% and year-to-date gains of 36%, LMT stock has an “A” rating the Portfolio Grader.

Bristol-Myers Squibb

Bristol-Myers Squibb checks in with a market capitalization of $169 billion.

The company is perhaps best known for its drug Abilfy, which is used to treat schizophrenia, depression and bipolar disorder; as well as a pair of blood thinners in Plavix and Eliquis, and cancer drugs Revlimid and Opdivo.

Because the company has multiple drugs that bring in more than $1 billion in revenue, Bristol-Myers is in a good position for continued profitability.

Q3 earnings included $11.22 billion in revenue and $1.99 per share in earnings – both of which topped estimates for $11.18 billion and $1.83 per share.

BMY stock is up 23% on the year and has an “A” rating in thePortfolio Grader.

source：InvestorPlace