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Large-cap stocks are frequently targeted among investors. They typically have greater stability and a proven track record, two reasons why they're beloved.
They also frequently pay dividends, providing another advantage for those seeking exposure. Large caps typically aren't as explosive as small-cap stocks, being tailored toward more conservative investors.
Still, many large-caps carry favorable growth expectations, including Cadence Design (CDNS - Free Report) , Broadcom (AVGO - Free Report) , and Arista Networks (ANET - Free Report) .
All three carry a favorable Zacks Rank, reflecting upward earnings estimate revisions among analysts.
In addition, all three provide exposure to technology, whose performance as a sector has been remarkable in 2023. Let’s take a closer look at each.
Cadence Design Systems
Cadence Design Systems, a current Zacks Rank #2 (Buy), offers products and tools that help customers design electronic products. The revisions trend has been particularly noteworthy for its current fiscal year, with the EPS estimate up 13% since December of last year.
Image Source: Zacks Investment Research
The company’s forecasted growth is hard to dismiss, with consensus estimates for its current year suggesting 20% earnings growth on 15% higher sales. And peeking ahead to FY24, estimates allude to an additional 14% uptick in earnings paired with 11% higher sales.
It’s worth noting that Cadence Design has been a stellar earnings performer, exceeding consensus EPS and revenue estimates in each of its last ten quarters. Just in its latest release, CDNS posted a 4% EPS beat and reported revenue 2% ahead of expectations.
Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Broadcom
Broadcom, a current Zacks Rank #2 (Buy), is a premier designer, developer, and global supplier of a broad range of semiconductor devices.
Broadcom has shown a notable commitment to increasingly rewarding shareholders, boasting a sizable 16.6% five-year annualized dividend growth rate. AVGO shares currently yield a solid 1.9% annually, nicely above the Zacks Computer and Technology sector average of 0.7%.
Image Source: Zacks Investment Research
The company’s payout has been protected by impressive cash-generating abilities. AVGO generated roughly $16.3 billion in free cash flow throughout its FY22, improving 22% on a year-over-year basis.
Image Source: Zacks Investment Research
Broadcom’s earnings are forecasted to climb 12% in its current year (FY23) on 8% higher sales, with FY24 consensus estimates suggesting 9% earnings growth paired with a 7% revenue bump.
Arista Networks
Arista Networks shares have benefited nicely from the AI frenzy in 2023, up more than 70% year-to-date and widely outperforming relative to the S&P 500. The company provides network switches to hyperscalers that speed up communication between computer servers.
The stock is a Zacks Rank #1 (Strong Buy), with expectations moving higher across all timeframes.
Image Source: Zacks Investment Research
The company boasts the most impressive growth profile of the bunch, with consensus estimates for its current fiscal year suggesting 43% earnings growth on 33% higher sales. Growth looks to continue in FY24, as estimates allude to an additional 10% boost in earnings paired with an 11% revenue climb.
Further, ANET’s 35.1% trailing twelve-month return on equity (ROE) is worth highlighting, reflecting a higher efficiency level in generating profits from existing assets relative to the respective Zacks Communication – Components industry average.
Image Source: Zacks Investment Research
Bottom Line
Large caps are found in nearly every portfolio, as their stable nature and successful track records are impossible to ignore.
And for those seeking large-cap exposure, all three stocks above – Cadence Design (CDNS - Free Report) , Broadcom (AVGO - Free Report) , and Arista Networks (ANET - Free Report) – could be great considerations, all boasting improved earnings outlooks.
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3 Top-Ranked Large Caps to Buy for Growth
Large-cap stocks are frequently targeted among investors. They typically have greater stability and a proven track record, two reasons why they're beloved.
They also frequently pay dividends, providing another advantage for those seeking exposure. Large caps typically aren't as explosive as small-cap stocks, being tailored toward more conservative investors.
Still, many large-caps carry favorable growth expectations, including Cadence Design (CDNS - Free Report) , Broadcom (AVGO - Free Report) , and Arista Networks (ANET - Free Report) .
All three carry a favorable Zacks Rank, reflecting upward earnings estimate revisions among analysts.
In addition, all three provide exposure to technology, whose performance as a sector has been remarkable in 2023. Let’s take a closer look at each.
Cadence Design Systems
Cadence Design Systems, a current Zacks Rank #2 (Buy), offers products and tools that help customers design electronic products. The revisions trend has been particularly noteworthy for its current fiscal year, with the EPS estimate up 13% since December of last year.
Image Source: Zacks Investment Research
The company’s forecasted growth is hard to dismiss, with consensus estimates for its current year suggesting 20% earnings growth on 15% higher sales. And peeking ahead to FY24, estimates allude to an additional 14% uptick in earnings paired with 11% higher sales.
It’s worth noting that Cadence Design has been a stellar earnings performer, exceeding consensus EPS and revenue estimates in each of its last ten quarters. Just in its latest release, CDNS posted a 4% EPS beat and reported revenue 2% ahead of expectations.
Below is a chart illustrating the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
Broadcom
Broadcom, a current Zacks Rank #2 (Buy), is a premier designer, developer, and global supplier of a broad range of semiconductor devices.
Broadcom has shown a notable commitment to increasingly rewarding shareholders, boasting a sizable 16.6% five-year annualized dividend growth rate. AVGO shares currently yield a solid 1.9% annually, nicely above the Zacks Computer and Technology sector average of 0.7%.
Image Source: Zacks Investment Research
The company’s payout has been protected by impressive cash-generating abilities. AVGO generated roughly $16.3 billion in free cash flow throughout its FY22, improving 22% on a year-over-year basis.
Image Source: Zacks Investment Research
Broadcom’s earnings are forecasted to climb 12% in its current year (FY23) on 8% higher sales, with FY24 consensus estimates suggesting 9% earnings growth paired with a 7% revenue bump.
Arista Networks
Arista Networks shares have benefited nicely from the AI frenzy in 2023, up more than 70% year-to-date and widely outperforming relative to the S&P 500. The company provides network switches to hyperscalers that speed up communication between computer servers.
The stock is a Zacks Rank #1 (Strong Buy), with expectations moving higher across all timeframes.
Image Source: Zacks Investment Research
The company boasts the most impressive growth profile of the bunch, with consensus estimates for its current fiscal year suggesting 43% earnings growth on 33% higher sales. Growth looks to continue in FY24, as estimates allude to an additional 10% boost in earnings paired with an 11% revenue climb.
Further, ANET’s 35.1% trailing twelve-month return on equity (ROE) is worth highlighting, reflecting a higher efficiency level in generating profits from existing assets relative to the respective Zacks Communication – Components industry average.
Image Source: Zacks Investment Research
Bottom Line
Large caps are found in nearly every portfolio, as their stable nature and successful track records are impossible to ignore.
And for those seeking large-cap exposure, all three stocks above – Cadence Design (CDNS - Free Report) , Broadcom (AVGO - Free Report) , and Arista Networks (ANET - Free Report) – could be great considerations, all boasting improved earnings outlooks.