“Too big to fail” is how we would describe the megacap stocks in this article today. While they will likely stand the test of time, it’s not all sunshine and rainbows as their scale can limit their ability to find new sources of growth.
This dynamic can trouble even the most skilled investors, but luckily for you, we started StockStory to help you navigate these trade-offs and uncover exceptional companies that break the mold. That said, here are two industry titans with attractive long-term potential and one that could be stalling.
One Mega-Cap Stock to Sell:
Wells Fargo (WFC)
Market Cap: $265 billion
Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE: WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses.
Why Is WFC Risky?
- Annual net interest income growth of 6% over the last five years lagged behind its banking peers as its large revenue base made it difficult to generate incremental demand
- Net interest margin shrank by 33.6 basis points (100 basis points = 1 percentage point) over the last two years, suggesting the profitability of its loan book is decreasing or the market is becoming more competitive
- Capital generation will likely be soft over the next 12 months as Wall Street’s estimates imply tepid tangible book value per share growth of 7.6%
At $87.61 per share, Wells Fargo trades at 1.5x forward P/B. Dive into our free research report to see why there are better opportunities than WFC.
Two Mega-Cap Stocks to Buy:
Mastercard (MA)
Market Cap: $480.3 billion
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE: MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Why Should You Buy MA?
- Annual revenue growth of 17% over the past five years was outstanding, reflecting market share gains this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 23.1% to outpace its revenue gains
- ROE punches in at 174%, illustrating management’s expertise in identifying profitable investments
Mastercard is trading at $545.10 per share, or 27.2x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
American Express (AXP)
Market Cap: $242.5 billion
Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE: AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.
Why Will AXP Outperform?
- Impressive 15.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 33% return on equity demonstrates management’s skill in finding high-return investments
American Express’s stock price of $353.98 implies a valuation ratio of 20x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.
