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The S&P 500 is up 7.6% year-to-date and 22.1% over the past 12 months. These are both attractive returns. However, over the same two periods, I’ve got three essential large-cap stocks that have run laps around the index.
Last November, I wrote a Barchart piece 3 Essential Stocks from the Top 100 That Are Truly Worth Investing In. The three names are Comfort Systems USA (FIX), Spotify Technology (SPOT), and Royal Caribbean Cruise Lines (RCL).
| Stock | YTD Return | 12-Month Return |
| Comfort Systems USA | 64.9% | 132.4% |
| Royal Caribbean Cruise Lines | 36.9% | 125.9% |
| Spotify Technology | 47.2% | 103.3% |
| S&P 500 | 7.6% | 22.1% |
As you can see by the table above, these three essential large-cap stocks have handily outperformed the index. None of these stocks is a Mag 7, yet they’ve managed to deliver for their shareholders.
Will they continue to do so in the future is the million-dollar question. While I believe in all three businesses and their respective business models, they’ve all come a long way in a relatively short period. The last thing investors want to do is base their buying decision on FOMO (the fear of missing out).
None of the three stocks is currently on Barchart’s Top 100 Stocks to Buy, with RCL and SPOT down over the past month, compared to a 1.6% gain for the index. Meanwhile, FIX was one of the best-performing U.S. stocks over the past month, up 29.1%. It’s on a significant roll.
Can one or more of these stocks double over the next 12 months? That’s unlikely. However, that doesn’t mean you’ve missed the boat on good returns in the future. Here’s why.
Comfort Systems USA (FIX)
The national provider of heating, ventilation, and air conditioning installation, maintenance, repair, and replacement services, according to Morningstar, was the top-performing stock in July, up 31.2%. That would be good as a one-year return.
When I recommended FIX last November, I wrote that there were three reasons for liking its stock:
1) According to S&P Global Market Intelligence, just four analysts cover FIX. As more analysts jump on the bandwagon and provide coverage, retail and institutional investors will pile in, acting as a catalyst for its share price.
2) It has net cash of $112 million and is growing, and
3) Although it operates in 137 cities in the U.S., it has very little coverage west of the Mississippi, providing it with plenty of future expansion.
Let’s consider how each of these points has changed over the past nine months.
S&P Global Market Intelligence says five analysts have price targets for the stock. The analysts have an Outperform rating for FIX with a median target of $775, 11% higher than its current share price. The number of analysts needs to double for the real money to get behind its stock.
At the end of 2025’s second quarter, Comfort Systems’ net cash position was $27.7 million, a considerable improvement from net debt of $126.9 million in Q2 2024. Over the trailing 12 months ended June 30, its net cash was $286.9 million, up from $132.3 million. That’s a nice doubling of its net cash.
Lastly, it had 178 locations in 27 states as of Dec. 31. It has plenty of expansion ahead of it, which explains the analyst EPS growth estimate of 35% over the next 3-5 years.
In 2024, its normalized earnings per share were $14.60. In the next three years, it’s expected to grow to $27.06 in 2027. It trades at 25.9 times the 2027 estimate. With all the growth potential, that’s a reasonable multiple.
Of the three stocks, this one has the best shot of doubling over the next year or two.
Spotify Technology (SPOT)
Of the three stocks, SPOT has the worst performance over the past month, down nearly 11%. That takes a bit of the shine off the music streaming services’ performance over the past year.
Spotify went public through a direct listing rather than a conventional IPO. Its shares opened trading on April 3, 2018, at $165.90. Based on this price, SPOT stock has gained nearly 21% annually in the seven years since.
As I said last November, it had a trailing 12-month free cash flow at the end of Q3 2024 of 1.8 billion euros ($1.91 billion). As of June 30, it was 2.8 billion euros ($3.23 billion), 69% growth over six months.
Equally important, its MAUs (monthly active users) increased by 11% year-over-year to 696 million, with premium paid subscribers up 12% to 276 million. In the first half of 2025, its net addition to its number of subscribers increased by 30% compared to the first half of 2024. This is helping boost its profitability.
What’s impressive is its growth in Latin America. In Q2 2021, Latin America accounted for 20% of Spotify’s premium subscribers. In Q2 2025, it was 23%, a 300-basis-point increase. At the same time, its Rest of the World segment saw premium subscribers grow to 14%, a 300-basis-point increase.
Ultimately, its business model will comprise four regions, each contributing between 20% and 30% of the company’s premium subscribers. That will result in a significant increase in free cash flow.
Spotify’s $ enterprise value is 7.66 times its trailing 12-month revenue. That’s the highest multiple as a public company. However, its EBITDA (earnings before interest, taxes, depreciation and amortization) margin is 11.6%, the highest in its history.
According to Barchart data, 22 of 32 analysts rate SPOT a Buy (4.28 out of 5), with a target price of $738.12, 12% higher than its current share price.
I don’t know if it can double over the next 12 months, but I definitely could see a double over 24 months as profits continue to grow.
Royal Caribbean Cruise Lines (RCL)
The cruise operators’ stock is down 4% over the past month. Investors sold the stock after it delivered mixed earnings on July 28. Selling on the news is typical for hard-charging stocks like RCL.
On the top line, Royal Caribbean’s sales in Q2 2025 were $4.54 billion, $10 million lower than Wall Street’s expectations. However, its earnings per share were $4.38, 34 cents better than the consensus and 36% higher than a year ago.
What really worried investors was the company’s guidance for the rest of the year. Royal Caribbean expects Q3 2025 EPS of $5.60 at the midpoint of its guidance, 24 cents shy of Wall Street, $15.48 for 2025, two cents higher than the analyst estimate.
What’s clear about its current situation is that profitability hasn’t been this high at any time in the past 25 years -- its trailing 12-month gross margin as of June 30 was 50.0% while its EBITDA margin was 36% -- suggesting that its business is firing on all cylinders.
As long as a major recession doesn’t arrive courtesy of the global tariff uncertainty, consumers will continue to take lots of cruises.
Trading at less than 21 times its 2025 EPS estimate, and its business is possibly in the best financial shape it’s been in since going public in 1993, I don’t think that’s a ridiculously high multiple. It could soon retest its all-time high of $355.91 that it hit on July 25.
As I said last November, RCL stock is an excellent long-term buy.
“With revenues expected to grow from $13.9 billion in 2023 to $22.67 billion in 2028, a compound annual growth rate of 10.3%, its EBITDA should nearly double over the same period,” I wrote.
“Barring another Covid-like issue, it should be smooth sailing for investors over the long term.”
I see very few reasons why it can’t continue to outperform the S&P 500. Buy for the long haul, adding to your position every time it falls into double digits below $100. In 10 or 20 years, you’ll be happy you did.
