2 Mid-Cap Stocks with Solid Fundamentals and 1 to Question

Mid-cap stocks often strike the right balance between having proven business models and market opportunities that can support $100 billion corporations. However, they face intense competition from scaled industry giants and can be disrupted by new innovative players vying for a slice of the pie.

These dynamics can rattle even the most seasoned professionals, which is why we started StockStory - to help you separate the good companies from the bad. Keeping that in mind, here are two mid-cap stocks with massive growth potential and one that may have trouble.

One Mid-Cap Stock to Sell:

BWX (BWXT)

Market Cap: $12.67 billion

Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE:BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.

Why Does BWXT Fall Short?

1. Annual revenue growth of 6.6% over the last five years was below our standards for the industrials sector
2. Costs have risen faster than its revenue over the last five years, causing its operating margin to decline by 2.4 percentage points
3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 3% annually

BWX’s stock price of $139.80 implies a valuation ratio of 38.5x forward P/E. Dive into our free research report to see why there are better opportunities than BWXT.

Two Mid-Cap Stocks to Watch:

Lennox (LII)

Market Cap: $21.83 billion

Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.

Why Are We Fans of LII?

1. Operating margin expanded by 4.6 percentage points over the last five years as it scaled and became more efficient
2. Earnings per share have massively outperformed its peers over the last two years, increasing by 24.3% annually
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

Lennox is trading at $615.25 per share, or 25.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Humana (HUM)

Market Cap: $27.45 billion

With over 80% of its revenue derived from federal government contracts, Humana (NYSE:HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.

Why Are We Positive On HUM?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 12.2% annual sales growth over the last five years
2. Enormous revenue base of $120.2 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
3. Projected revenue growth of 5.9% for the next 12 months suggests its momentum from the last two years will persist

At $227.95 per share, Humana trades at 15.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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