7 Top-Rated Large-Cap Stocks to Buy and Hold (2024)

A time of challenging market conditions (like we’re seeing today) can be a frustrating time to invest. There is, however, a silver lining. A market downturn is a great opportunity to load up on high-quality names. For example, large-cap stocks with strong fundamentals.

When stocks overall move lower, that’s the case for both more speculative plays, as well as sturdier opportunities. The latter may not experience as sharp of a plunge as the former. In fact, some of them, like commodities stocks, can perform well, as rising commodities prices outweigh external factors. Still, if you have a long time horizon in mind, you can enter/add to a position at an ideal price point.

So, what are some examples of such plays? Consider these seven top-rated, large-cap stocks. Each one has the potential to deliver solid returns (via appreciation and dividends) for buy and hold investors.

CF Industries Holdings (CF)

CF Industries Holdings (NYSE:CF) is a good example of what I was talking about above. Thanks to a boom in commodities prices (in its case, fertilizer), shares are up sharply in what has so far been a down year for stocks.

As the Russia/Ukraine conflict has slashed supply of key fertilizer ingredients like ammonia, nitrogen and urea, it’s no surprise CF stock surged earlier this year. More recently, it has been trading sideways, as investors factor in a pullback in spot fertilizer prices. Yet that doesn’t mean CF Industries’ key tailwind is about to bust out.

Even if prices fall from their highs, they’re expected to remain elevated compared to prior year levels. This bodes well for the stock, as it today trades at a heavily discounted valuation (5x estimated 2022 earnings). An established name in this space, it stands to continue to perform well, during today’s boom, and beyond.

This stock earns an “A” rating in my Portfolio Grader.

Dollar Tree (DLTR)

Like other stocks in the space, shares in discount retailer Dollar Tree (NASDAQ:DLTR) plunged in mid-May, following underwhelming earnings reports from two of its peers.

However, within a week, DLTR stock completely bounced back. The reason? Its strong quarterly earnings report. Reporting strong revenue and earnings growth, demonstrating the market’s fears of inflationary pressures affecting its performance were an overreaction. What does this short-term boost have to do with its bona fides as a long-term buy-and-hold play?

Like some other high-quality discount retailers, it’s thriving despite the challenges presented by today’s high rates of inflation. As this factor has little-to-no impact on its growth, Dollar Tree is well positioned to continue steadily increasing its revenue and earnings. This will enable the stock to continue delivering solid returns. With this, consider it one of the best large-cap stocks out there to make a long-term position.

This stock earns an “A” rating in my Portfolio Grader.

Hershey Company (HSY)

Hershey Company (NYSE:HSY) is a defensive play, with a deep economic moat. It also pays out a steady dividend (forward yield of 1.72%), a payout that has gone up twelve years in a row. All these factors make it the kind of stock you want to own in a down market.

These safe harbor bona fides also explain why HSY stock is up for the year. In the move to “risk off,” investors have pivoted to venerable names like this one. It also helps that the confectionary giant has also done a great job of adjusting to the impact of rising raw material, labor and transport costs.

With demand staying robust, despite it passing along costs to the consumer, Hershey raised its full-year sales and earnings forecast in April. More resistant to today’s economic challenges than many other stocks (including some other packaged goods stocks), consider it a buy.

This stock earns an “A” rating in my Portfolio Grader.

Kroger (KR)

Grocery chain operator Kroger (NYSE:KR) is yet another high-quality, large-cap stock that has performed well in 2022. Even after a pullback last month, it’s up around 14.5% year-to-date.

Speaking of its pullback, the May selloff in KR stock should be seen as a buying opportunity. Why? Its drop was entirely due to the downward pressure put on retailer stocks following the bad quarterly numbers for two large retailers that I referenced above when talking about Dollar Tree.

Although Kroger hasn’t yet reported earnings, the sell-side has raised its earnings forecast in recent months. This suggests the company will show, like it did last quarter, that high inflation is not affecting its performance, like it is for other retailers. Only partially bouncing back in recent weeks, you may want to take advantage of this weakness, by starting to accumulate a long-term position in the stock.

This stock earns an “A” rating in my Portfolio Grader.

Occidental Petroleum (OXY)

The sharp rise in oil prices, plus Warren Buffett’s big purchase of shares, have resulted in an epic run for Occidental Petroleum (NYSE:OXY) so far this year. It’s up 125% year-to-date.

However, don’t take this to mean you’ve “missed out” on this opportunity. This remains one of the best large-cap stocks out there to make a long-term holding. Why? There are many factors, not just Russia’s invasion of Ukraine, that are behind the spiking of crude oil prices. Prices could stay elevated for longer than expected.

Long-term, there’s something else (not talked about that much) that could mean continued growth for OXY stock. That would be its move into “net-zero” oil. Moving into this area could pay off down the road, if stricter environmental regulations require its use. Benefiting from high oil prices, and with a “green” catalyst hiding in plain sight, it’s a buy.

This stock earns an “A” rating in my Portfolio Grader.

Paychex (PAYX)

In contrast to many of the large-cap stocks listed above, Paychex (NASDAQ:PAYX) shares are in the red for 2022, down over 6%. Recession fears are likely putting pressure on this payroll, benefits and HR outsourcing company. After all, recessions mean lower employment, hence lower demand for its services.

But it’s possible investors are too pessimistic. Providing back office services is essential for the operation of a small or medium-sized enterprise. An economic downturn shouldn’t have an outsized impact on its operating performance.

PAYX stock also has a relatively high dividend (forward yield of 2.58%). Raising its dividend 8 years in a row, over the past five years it has raised its dividend by an average of 8.53% per year. This stock offers a lot for buy-and-hold investors. It provides a steady return through its dividend. In the years ahead, it could also benefit from steady price appreciation.

This stock earns an “A” rating in my Portfolio Grader.

Sociedad Quimica Y Minera De Chile (SQM)

Sociedad Quimica Y Minera De Chile (NYSE:SQM), or SQM for short, is a Chilean fertilizer and mining company. Saying it has been firing on all cylinders lately is an understatement. The company has not only benefited from the boom in fertilizer prices.

A major lithium supplier, it has been benefiting from strong demand, due to its use in the production of electric vehicle (EV) batteries. As a result, its earnings are up substantially. So too, is its stock price. SQM stock is up around 96% since January, and up 112% over the past twelve months.

After another big spike late last month, SQM has pulled back. Further weakness may be ahead. However, it has long-term catalysts like the lithium boom on its side. Coupled with a low valuation (forward earnings multiple of 8.8x), and an above-average dividend (4.57%), long-term investors may want to start slowly building up a position.

This stock earns an “A” rating in my Portfolio Grader.

On the date of publication, Louis Navellier has positions in CF, KR, and SQM in this article. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this articledid not hold(either directly or indirectly) any positions in the securities mentioned in this article.