Large Cap VS Small Cap Stocks - 2021
Large Cap VS Small Cap Stocks – 2021

What is a large-cap stock?

The stock of a company having a market capitalization of $10 billion or more is called a large-cap stock. Just like blue-chip stocks, large-cap stocks are shares of well-established companies.

What do large-cap growth stocks mean?

Large-cap companies’ stocks that are expected to grow faster than other large-cap stocks are known as large-cap growth stocks.

What do large-cap value stocks mean?

Large-cap companies’ stocks that are cheap or growing more slowly than other large-cap stocks are known as large-cap value stocks.

What are the best large-cap stocks to buy now?

The following is the top large-cap stocks list:

  • MercadoLibre (MELI)

MercadoLiber has been Latin America’s e-commerce and payment powerhouse for quite a long time. The biggest reason the company is a success is because of its payment option MercadoPago. The MercadoPago payment option has gained a tremendous amount of popularity within a short matter of time.

  • Starbucks (SBUX)

This large-cap stock, because of its considerable competitive advantage, offers both, reliable revenue stream as well as growth. Despite the setbacks from the pandemic, Starbucks has continued to gain market share and is looking forward to gaining more share.

  • Procter & Gamble

This dominant maker of toothpaste, detergent, soap, and other consumer staples comes with such reliability and durability that most shareholders need for their portfolios. This company is a “dividend aristocrat,” which means it has increased its dividends for at least 25 years.

What are the best large-cap dividend stocks to buy now?

The following are the top large-cap dividend stocks to buy now:

  • Pfizer (PFE)

With stable income and staying power, PFE is the poster child for large stocks. The products of this global pharmaceutical powerhouse are essential to the lives of millions around the globe. The current yield of PFE is 4.17%, and the market cap is 204.44 billion.

  • Coca-Cola (KO)

This world’s largest beverage company has found the winning strategy with the help of which it will continue to remain the largest beverage company in the world for so many years in the future. The strategy includes putting an eye on up-and-coming beverage brands and making progressive brands among those a part of the Coca-Cola family. The current yield of KO is 3.32%, and the market cap is 218.25 billion.

  • Philip Morris International (PM)

This global powerhouse comes with some of the best cigarette brands in the world, including Parliament, Marlboro, and Chesterfield. Since smoking is common in Africa and Asia, Philip Morris International has largely invested in those continents. The current yield of PM is 6.29%, and the market cap is 122.84 billion.

What is a small-cap stock?

The stock of a publicly-traded company with a market capitalization ranging from $300 million to round-about $2 billion is called a small-cap stock.

What do small-cap value stocks mean?

Small companies’ stocks that are cheap or growing more slowly than other small-cap stocks are known as small-cap value stocks.

What are the two best small-cap stocks to buy now?

The following is the top small-cap stocks list:

  • Unisys (UIS)

This information tech company has a global reach. Unisys operates with two business segments, technology, and services. The main focus of Unisys is security, and since companies are moving into the digital world, growth opportunities for Unisys are plenty.

  • Big Lots Inc. (BIG)

This American retail company, with over 1400 stores in 47 states offers an assortment of merchandise, including furniture, consumables, toys, seasonal products, housewares, electronics, and more.

What are the two best small-cap tech stocks to buy now?

The following are the top small-cap tech stocks to buy now:

  • Unisys (UIS)

See above in the top small-cap stocks list.

  • Cerence Inc. (CRNC)

This company develops an extensive range of car technologies and has innovated for more than 20 years. CRNC has more than 1420 patents, and its technology can be found in roundabout 325 million cars around the globe.

  • Vaxart Inc. (VXRT)

This American biotechnology company focuses on developing oral recombinant vaccines that operate on the immune system of the gut. Vaxart is one of those companies that had the highest total return over the last twelve months.

What are the differences between large-cap stocks and small-cap stocks?

Large-cap stocks come with the decided advantage in terms of research and liquidity. They are mostly available in the public, and there is an abundance of data available on them for investors to review.

Furthermore, large-cap stocks trade at higher volumes than small-cap stocks and they tend to operate with more market efficiency.

Whereas,

Compared to large-cap stocks, small-cap stocks represent risky investments and don’t have that many financial resources. They are more volatile and have less access to capital.

All of this complicates it for small-cap stocks to bridge gaps in cash flow. During the lows of the economic cycle, things can get tough for small-cap stock companies.

Although small-cap stock companies are risky to invest in, there are valuable advantages to investing in them. One of the benefits is that small-cap stock companies generate proportionally large growth rates with ease.

Also, small-cap stock companies adapt to changing market conditions quickly in the same way a small boat quickly changes its course in the sea.

Which one is safer to invest, small-cap stocks, or large-cap stocks?

Since small-cap stock companies represent riskier investments, it becomes pretty obvious that investing in large-cap stock companies, especially during the lows of the economic cycle, is a safer option than investing

in small-cap stock companies. The safe nature of large-cap stocks makes them more attractive to investors, however, this doesn’t mean you invest in any large-cap stock without analyzing its fundamentals and doing proper research. 

Additionally, large-cap stocks also offer dividends; ultimately, becoming more stable stocks. That said, one thing that makes large-cap stocks inferior to small-cap stocks is the growth potential.

The large-cap stocks do not have the growth potential of small-cap stocks as the size of large-cap stocks prevents them to change direction quickly and capitalize on opportunities.