The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. Keeping that in mind, here are two S&P 500 stocks positioned to outperform and one that may struggle.
One Stock to Sell:
Republic Services (RSG)
Market Cap: $65.02 billion
Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.
Why Does RSG Give Us Pause?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.7% for the last two years
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
- Anticipated sales growth of 4.4% for the next year implies demand will be shaky
Republic Services is trading at $211.31 per share, or 29.4x forward P/E. To fully understand why you should be careful with RSG, check out our full research report (it’s free).
Two Stocks to Buy:
Comfort Systems (FIX)
Market Cap: $59.66 billion
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Why Do We Love FIX?
- Demand is greater than supply as the company’s 56% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill
- Free cash flow margin jumped by 15.1 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are climbing as management makes more lucrative bets
Comfort Systems’s stock price of $1,717 implies a valuation ratio of 28.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
ADP (ADP)
Market Cap: $105 billion
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
Why Is ADP a Good Business?
- Solid 7.9% annual revenue growth over the last five years indicates its offerings solve complex business issues
- Unparalleled revenue scale of $21.95 billion gives it an edge in distribution
- Robust free cash flow margin of 21.7% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
At $262.44 per share, ADP trades at 22.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
