3 Large-Cap Stocks Walking a Fine Line

Large-cap stocks have the power to shape entire industries thanks to their size and widespread influence. With such vast footprints, however, finding new areas for growth is much harder than for smaller, more agile players.

This is precisely where StockStory comes in - our job is to find you high-quality companies that can win regardless of the conditions. That said, here are three large-cap stocks whose momentum may slow and a few alternatives you should consider instead.

Kimberly-Clark (KMB)

Market Cap: $43.36 billion

Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE:KMB) is now a household products powerhouse known for personal care and tissue products.

Why Does KMB Worry Us?

1. Sales were flat over the last three years, indicating it's failed to expand its business
2. Estimated sales decline of 1.8% for the next 12 months implies an even more challenging demand environment

At $130.22 per share, Kimberly-Clark trades at 17.2x forward P/E. Dive into our free research report to see why there are better opportunities than KMB.

Norfolk Southern (NSC)

Market Cap: $56.84 billion

Starting with a single route from Virginia to North Carolina, Norfolk Southern (NYSE:NSC) is a freight transportation company operating a major railroad network across the eastern United States.

Why Do We Pass on NSC?

1. Weak unit sales over the past two years suggest it might have to lower prices to accelerate growth
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. Free cash flow margin dropped by 11.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Norfolk Southern’s stock price of $250.02 implies a valuation ratio of 19.2x forward P/E. Check out our free in-depth research report to learn more about why NSC doesn’t pass our bar.

D.R. Horton (DHI)

Market Cap: $37.98 billion

One of the largest homebuilding companies in the U.S., D.R. Horton (NYSE:DHI) builds a variety of new construction homes across multiple markets.

Why Are We Hesitant About DHI?

1. Demand cratered as it couldn’t win new orders over the past two years, leading to an average 19.4% decline in its backlog
2. Earnings per share have contracted by 5.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
3. Diminishing returns on capital suggest its earlier profit pools are drying up

D.R. Horton is trading at $122.55 per share, or 9.6x forward P/E. Dive into our free research report to see why there are better opportunities than DHI.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.