3 Top Large Cap Stocks for a Stable Approach: ETN, DECK, UNH
Large-cap stocks are present in almost every portfolio. They carry a well-established nature, have greater analyst coverage, and commonly pay dividends, all of which make them so popular.
Of course, their steady nature may not appeal to all. Still, the decreased volatility large-caps possess is well worth it in the eyes of more conservative investors.
For those seeking large-cap exposure, three stocks – Deckers Outdoor DECK, Eaton ETN, and UnitedHealth Group UNH – have all seen their near-term outlooks shift positively. Let’s take a closer look at each.
Deckers Outdoor Raises Guidance
Deckers Outdoor is a leading designer, producer, and brand manager of innovative, niche footwear and accessories developed for outdoor sports and other lifestyle-related activities. The stock sports a Zacks Rank #2 (Buy), with the revisions trend notably bullish for its current fiscal year.
Continued brand momentum among UGG and Hoka shoes aided its recent quarterly release, leading the company to up its current fiscal year outlook. Analysts have updated their outlook for the company’s current fiscal year accordingly following the print, with the $5.27 Zacks Consensus EPS estimate suggesting 8% growth year-over-year.
Below is a chart illustrating the company’s sales on a quarterly basis.
Image Source: Zacks Investment Research
The company has also been enjoying margin expansion throughout recent periods, brightening its profitability picture nicely. It enjoyed the same throughout its latest release, with its gross margin expanding to 56.9% vs 51.3% in the year-ago period.
Please note that the chart below is on a trailing twelve-month basis.
Image Source: Zacks Investment Research
While a decent chunk of apparel companies have reported weak results over recent quarters, DECK’s results reflect an overall healthy consumer. A major issue other apparel companies have faced is delivering what consumers actually want.
ETN Shares Reflect AI Play
Eaton is an intelligent power management company that provides products for the data center, utility, industrial, commercial, machine building, residential, aerospace, and mobility markets. Shares reflect an under-the-radar play on AI, undoubtedly attractive to many investors looking to ride the frenzy.
The stock sports a favorable Zacks Rank #2 (Buy), with its earnings outlook shifting positively across the board.
Image Source: Zacks Investment Research
For those with an appetite for income, shares currently yield 1.2% annually, with the company’s 5.9% five-year annualized dividend growth rate also reflecting a shareholder-friendly nature. Impressively, the company has paid a dividend on its shares every year since 1923.
Below is a chart illustrating the company’s dividends paid on an annual basis.
Image Source: Zacks Investment Research
The valuation picture here has gotten rich relative to historical levels, but that’s reflective of investors’ growth expectations. The current PEG ratio works out to 2.2X, not too far off from the five-year median and beneath five-year highs of 2.8X.
UnitedHealth Keeps Paying Shareholders
UnitedHealth, a current Zacks Rank #2 (Buy), provides a wide range of healthcare products and services, including health maintenance organizations, point-of-service plans, preferred provider organizations, and managed fee-for-service programs.
Shares have been red-hot over the last three months, gaining nearly 20% and driven by better-than-expected quarterly results. Concerning its latest release, the company exceeded both consensus earnings and sales expectations, with EPS growing 10% alongside a 6% sales increase.
As shown below, shares popped following the release.
Image Source: Zacks Investment Research
Like ETN, the company has long displayed a shareholder-friendly nature, regularly upping its payout. Impressively, UNH has upped its dividend payout five times over the last five years, translating to a 15% five-year annualized dividend growth rate.
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 – Deckers Outdoor DECK, Eaton ETN, and UnitedHealth Group UNH – could be great considerations, all boasting improved earnings outlooks.
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UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
Eaton Corporation, PLC (ETN) : Free Stock Analysis Report
Deckers Outdoor Corporation (DECK) : Free Stock Analysis Report