Home Market News The Stability of Mega-Cap Stocks: Long-Term Gains with Visa, Broadcom, and Microsoft

The Stability of Mega-Cap Stocks: Long-Term Gains with Visa, Broadcom, and Microsoft

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The Stability of Mega-Cap Stocks: Long-Term Gains with Visa, Broadcom, and Microsoft
Mega-Cap Stocks for Stability - The Blue Chips of the Market: 3 Mega-Cap Stocks for Stability

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Investors need not scour small-cap stocks for substantial gains. Opting for mega-cap stocks for stability can pave the way for consistent returns in the long haul. This tried-and-true strategy has stood the test of time, offering a reliable anchor in turbulent market waters.

Within the realm of mega-cap stocks, a select few stand out as drivers of market buoyancy. These behemoths, with market caps surpassing $250 billion, are synonymous with household names. However, not all mega-cap stocks are made equal. Delving into the elite tier, here are three top-notch selections that exude stability and promise.

Visa (V)

several Visa branded credit cards

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Visa (NYSE:V) claims its spot as the smallest entity on this prestigious list, yet boasts an impressive $560 billion market cap. As a leader in credit and debit cards, Visa sports a 35 P/E ratio and a respectable 0.75% dividend yield. Dishing out annual dividend increments of no less than 10%, Visa flaunts robust cash flow backing these enrichments.

At the heart of its revenue stream lie returns from each credit and debit transaction. Attesting to the resilience of the U.S. consumer, Visa’s financial reports paint a vivid picture of consumer spending habits. Even amidst cutbacks in varied product categories, consumers exhibit unwavering loyalty to their plastic companions.

In the initial quarter of fiscal 2024, Visa reported a 9% year-over-year revenue hike coupled with a 17% year-over-year surge in net income. These impressive figures propelled the company to a net profit margin of 57.0%. With ample cash reserves, the fintech marvel initiated stock buybacks and dividend distributions amounting to $4.4 billion. Over the past half-decade, Visa shares have soared by a remarkable 79%.

Broadcom (AVGO)

broadcom (AVGO) logo outside office building

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Broadcom (NASDAQ:AVGO), a semiconductor and software titan, is poised to ascend the ranks to trillion-dollar eminence. Currently standing at a $611 billion market cap and a 49 P/E ratio, Broadcom also offers a 1.59% dividend yield with annual upticks of at least 10%.

The recent acquisition of VMware has already borne fruit for this tech juggernaut. Noteworthy is the 34% year-over-year surge in revenue at the onset of fiscal 2024. Stoking this rise were amplified demands for VMware Cloud Foundation and AI data centers, propelling Broadcom’s upward trajectory.

A consistent top performer, Broadcom has outstripped the market with shares soaring by 111% in the past year and an impressive 339% over the preceding five years. Garnering a unanimous “Strong Buy” acclaim from 22 analysts, Broadcom is predicted to scale a 20% upside, with a peak price target at $1,720 and a floor at $1,405, hinting at further zeniths.

Microsoft (MSFT)

Microsoft logo close up. Microsoft (MSFT) Flagship Store Fifth Avenue, Manhattan, NYC.

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Microsoft (NASDAQ:MSFT) reigns as the most valuable publicly traded entity, basking in the glow of a $3.1 trillion market cap. A stalwart performer, Microsoft has delivered a 53% gain over the past year and an impressive 257% growth over the last five years.

The game-changing Copilot has been a catalyst for Microsoft’s meteoric growth. Seamlessly integrating with the company’s suite of offerings, this AI marvel has expanded consumer choices, garnering accolades and boosting price targets. Analysts have dubbed Copilot as Microsoft’s “iPhone Moment,” with some setting price targets as high as $500.

An alignment of expert voices reverberates with positivity regarding Microsoft’s prospects. Earning a unanimous “Strong Buy” rating from 34 analysts, the stock is poised for an 11% uptick according to the average price target. Within S&P 500 or Nasdaq 100 mimicking funds, Microsoft commands a significant portfolio presence, with allocations often exceeding 10%.

As of the publication date, Marc Guberti held long positions in MSFT and AVGO. The opinions expressed in this article reflect those of the writer and are subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti, a finance freelance writer at InvestorPlace.com and host of the Breakthrough Success Podcast, contributes to esteemed publications like U.S. News & World Report, Benzinga, and Joy Wallet.