--- title: "I Recommend a Quintet of Mid-Cap Stocks" type: "News" locale: "en" url: "https://longbridge.com/en/news/290680834.md" description: "The author recommends five mid-cap stocks—Dillard's, Matson, Cullen/Frost Bankers, National Fuel Gas, and Oshkosh—as undervalued alternatives to large-cap indices. Highlighting mid-caps' potential for superior performance and lower analyst coverage, the piece details each company's financial metrics, such as P/E ratios and historical returns. Historical data suggests these recommendations have outperformed S&P 400 and S&P 500 indices, though past results do not guarantee future gains." datetime: "2026-06-24T10:41:16.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/290680834.md) - [en](https://longbridge.com/en/news/290680834.md) - [zh-HK](https://longbridge.com/zh-HK/news/290680834.md) --- # I Recommend a Quintet of Mid-Cap Stocks **I Recommend a Quintet of Mid-Cap Stocks** **Don't be a slave to the S&P 500** **Summary** - Many investors, purposely or not, concentrate exclusively on large-capitalization stocks. - Mid-caps can lead to performance different from, and perhaps better than, the market indices. - These five seem to me promising and reasonably priced. June 22, 2026 (Maple Hill Syndicate) Many investors, either purposely or by default, peg their fortunes to large-capitalization stocks. Either they invest in an index fund, or the stocks they hold are all members of the Standard & Poor's 500. That's their privilege. But if you want your portfolio to perform differently, and perhaps better, than your neighbor's, consider increasing your holdings of mid-capitalization stocks. I've always been partial to mid-cap stocks, because they are less intensely followed by Wall Street analysts than the biggest companies are. Therefore, I figure, there's a greater chance of finding a bargain. For the same reason, I like small-capitalization stocks, but they tend to be riskier than mid-caps. For the most part, big-cap stocks have ruled the roost in the past five years. But mid-caps beat big-caps last year. And this year through June 19, mid-caps are up 15.4%, versus 10.2% for the large-caps. Here are five new mid-cap recommendations. **Dillard's** People think of department stores as a buggy-whip industry, doomed by specialty stores and internet retailing. Yet Dillard's Inc. , a department-store chain based in Little Rock, Arkansas, has appreciated 37% in the past year, 243% in the past five years and 833% over the past decade. The stock sells for 13 times earnings, which I consider an attractive multiple, especially in today's pricey market. Dillard's has shown a profit in nine of the past 10 years, the exception being the fiscal year ended in January 2021, which was crippled by the pandemic. **Matson** Matson Inc. (MATX) is a Hawaii-based ocean shipper that dominates ports in Hawaii and Alaska. I sold my shares when President Trump announced his Liberation Day tariffs in April 2025. In hindsight, that was a mistake. Its stock is up 71% in the past year and 478% in the past 10 years. Its return on equity has been at least 15%, the level that I consider good, most years, and considerably higher in some years. The stock is priced attractively, in my opinion, at 14 times earnings. **Cullen/Frost Bankers** Texan, through and through. Cullen/Frost Bankers Inc. (CFR) is based in San Antonio, Texas, and does almost all of its business in the Lone Star State. But it's not too dependent on the energy industry, the business for which Texas is best known. Consistency? Cullen/Frost has it in spades. It has shown a profit every year since its founding in 1868. That means it weathered the Depression, the Great Recession and the pandemic without ever dipping into red ink. **National Fuel** Based in Williamsville, New York, National Fuel Gas Co. (NFG) is active in all three phases of the natural-gas industry. It explores for and produces natural gas. It operates some 2,600 miles of pipelines. And it operates a utility company, National Fuel, in western New York and northwestern Pennsylvania. Over the past five years, National Fuel Gas has increased its corporate net worth by about 12% a year. That's better than International Business Machines Corp. (IBM) and slightly better than Exxon Mobil Corp. (XOM). National Fuel is cheaper than either, selling for about 10 times earnings. **Oshkosh** Fire engines, military trucks and lift platforms are some of the major products at Oshkosh Corp. (OSK), which is based in Oshkosh, Wisconsin. It has grown its sales at an annual clip of 11% the past five years, and earnings at a 22% pace. Last year, however, was disappointing. Revenue grew less than 2% and earnings fell almost 10%. I might have an emotional attachment to this stock, as I made a lot of money in it early in my career. But it looks good to me at 13 times analysts' estimate for the next four quarters' earnings. **Performance** Mid-cap recommendations are sprinkled into my columns from time to time. But I've written only two previous columns specifically about mid-caps. The average 12-month gain on these recommendations has been 26.2%. That's considerably above the average on the Standard & Poor's 400 MidCap Total Return Index, which has been 16.6%. It also beats the return on the large-cap Standard & Poor's 500 Total Return Index, which weighed in at 21.0%. Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future. My last set of mid-cap recommendations scored a 35.3% return, handily beating the rival indices. The best performer was Seadrill Ltd. (SDRL), up 82%. The worst was Meritage Homes Corp. (MTH), down 10.5%. **Disclosure:** I own Cullen/Frost personally and for some clients. I own Meritage for most clients, but am considering whether to keep or sell it. John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts. His firm or clients may own or trade the stocks discussed here. He can be reached at jdorfman@dorfmanvalue.com. ### Related Stocks - [OSK.US](https://longbridge.com/en/quote/OSK.US.md) - [CFR.US](https://longbridge.com/en/quote/CFR.US.md) - [NFG.US](https://longbridge.com/en/quote/NFG.US.md) - [DDS.US](https://longbridge.com/en/quote/DDS.US.md) - [MATX.US](https://longbridge.com/en/quote/MATX.US.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) - [SPY.US](https://longbridge.com/en/quote/SPY.US.md) - [IVV.US](https://longbridge.com/en/quote/IVV.US.md) - [VOO.US](https://longbridge.com/en/quote/VOO.US.md) - [SPLG.US](https://longbridge.com/en/quote/SPLG.US.md) - [SPXL.US](https://longbridge.com/en/quote/SPXL.US.md) - [UPRO.US](https://longbridge.com/en/quote/UPRO.US.md) - [SSO.US](https://longbridge.com/en/quote/SSO.US.md) - [SH.US](https://longbridge.com/en/quote/SH.US.md) - [SPXS.US](https://longbridge.com/en/quote/SPXS.US.md) - [SPXU.US](https://longbridge.com/en/quote/SPXU.US.md) - [SDS.US](https://longbridge.com/en/quote/SDS.US.md) - [SPYI.US](https://longbridge.com/en/quote/SPYI.US.md) - [JEPI.US](https://longbridge.com/en/quote/JEPI.US.md) - [XYLD.US](https://longbridge.com/en/quote/XYLD.US.md) - [IBM.US](https://longbridge.com/en/quote/IBM.US.md) - [XOM.US](https://longbridge.com/en/quote/XOM.US.md) - [SDRL.US](https://longbridge.com/en/quote/SDRL.US.md) - [MTH.US](https://longbridge.com/en/quote/MTH.US.md) ## Related News & Research - [The Mag 7's reign is ending. 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