When it comes to mid-cap stocks, companies between $2 billion and $10 billion in market value often represent the best of both worlds. They’re large enough to weather short-term challenges, but they also have the growth potential to expand significantly. Unlike blue-chip giants, mid-caps have plenty of room to grow while benefiting from a solid financial foundation. With the S&P 500’s weighted average market cap hovering around $300 billion and the top 100 companies well over $100 billion, mid-caps represent an attractive alternative for investors looking for companies with room to grow.
Given strong financial performance, recent momentum, and favorable market conditions, here are three mid-cap stocks to consider adding to your watchlist:
Brinker International Inc. (EAT): A Restaurateur with Room to Grow
Brinker International (EAT), based in Dallas, is behind two popular dining brands: Chili’s and Maggiano’s Little Italy. Unlike other dining chains like McDonald’s, which make most of their revenue from franchising, about half of Brinker’s Chili’s locations are company-owned, and it does not franchise Maggiano’s for new locations. This direct ownership model allows Brinker to capitalize on favorable trends in the restaurant industry. In fiscal 2024, the company posted a 7% increase in same-store sales compared to the prior year. The stock has surged nearly 170% year-to-date, fueled by strong financial results and growing investor interest. At a market value of $5.2 billion, Brinker is poised for continued growth.
Hims & Hers Health Inc. (HIMS): A Telehealth Company with Explosive Growth
Hims & Hers (HIMS) is a telehealth company that connects individuals with licensed care professionals to provide a range of health and wellness services. The company’s offerings go beyond traditional telehealth consultations to include prescription medications, over-the-counter products, skincare, and sexual health products. This fast-growing marketplace has proven to be a hit with consumers, with a 65% surge in revenue for fiscal 2024. Projections show the company is on track to grow another 40% in fiscal 2025. With a market value of $5.1 billion, Hims & Hers is making waves in a rapidly expanding industry, making it a compelling pick for investors looking for long-term growth.
Remitly Global Inc. (RELY): A Fintech Stock with a Lucrative Niche
Remitly Global (RELY) is a fintech company that focuses on digital financial services for immigrants and expatriates who need cross-border transactions. While the niche market may be smaller than the general fintech sector, Remitly has tapped into a lucrative and underserved segment, generating over $1.2 billion in revenue for fiscal 2024, up 30% from the previous year. The company is projected to grow another 25% in fiscal 2025. Backed by early investor Jeff Bezos, Remitly’s innovative approach to international money transfers has given it a runway for growth that larger fintech firms are largely overlooking. With a market value of $3.9 billion and shares up nearly 50% over the last three months, Remitly is a stock with significant upside potential.
