Megacap stocks are behemoths that set the tone for their industries, and their massive scale typically leads to wide moats. However, the downside is that most have already exploited their existing market opportunities and must invest heavily to expand further, a risky proposition.
These trade-offs can cause headaches for even the most seasoned professionals, which is why we started StockStory - to help you find high-quality companies that can grow their earnings no matter what. That said, here are two industry titans with attractive long-term potential and one whose existing offerings may be tapped out.
One Mega-Cap Stock to Sell:
Walmart (WMT)
Market Cap: $816.7 billion
Known for its large-format Supercenters, Walmart (NASDAQ:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.
Why Are We Cautious About WMT?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.3% over the last three years was below our standards for the consumer retail sector
- Gross margin of 25.1% is an output of its commoditized inventory
- Operating margin of 4.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
At $102.66 per share, Walmart trades at 34.9x forward P/E. Dive into our free research report to see why there are better opportunities than WMT.
Two Mega-Cap Stocks to Watch:
UnitedHealth (UNH)
Market Cap: $354.6 billion
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE:UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Do We Like UNH?
- Decent 10.6% annual revenue growth over the last five years beat most of its peers, showing customers find value in its products and services
- Dominant market position is represented by its $450.1 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
- Industry-leading 19.2% return on capital demonstrates management’s skill in finding high-return investments
UnitedHealth’s stock price of $394.88 implies a valuation ratio of 18.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Eli Lilly (LLY)
Market Cap: $1.05 trillion
Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE:LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
Why Is LLY a Good Business?
- Annual revenue growth of 43.1% over the past two years was outstanding, reflecting market share gains this cycle
- Adjusted operating margin improvement of 18.7 percentage points over the last two years demonstrates its ability to scale efficiently
- Share buybacks catapulted its annual earnings per share growth to 31.4%, which outperformed its revenue gains over the last five years
Eli Lilly is trading at $1,175 per share, or 29.2x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.