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. That said, here is one S&P 500 stock that is positioned to outperform and two that may struggle.
Two Stocks to Sell:
Huntington Ingalls (HII)
Market Cap: $12.51 billion
Building Nimitz-class aircraft carriers used in active service, Huntington Ingalls (NYSE: HII) develops marine vessels and their mission systems and maintenance services.
Why Are We Out on HII?
- The company has faced growth challenges as its 5.3% annual revenue increases over the last two years fell short of other industrials companies
- Estimated sales growth of 2.5% for the next 12 months implies demand will slow from its two-year trend
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
At $316.50 per share, Huntington Ingalls trades at 17.8x forward P/E. Dive into our free research report to see why there are better opportunities than HII.
CVS Health (CVS)
Market Cap: $119.1 billion
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Does CVS Worry Us?
- The company has faced growth challenges as its 6.3% annual revenue increases over the last two years fell short of other healthcare companies
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Earnings per share fell by 1.5% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
CVS Health’s stock price of $93.03 implies a valuation ratio of 12.3x forward P/E. If you’re considering CVS for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Philip Morris (PM)
Market Cap: $293.7 billion
Founded in 1847, Philip Morris International (NYSE: PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Why Will PM Outperform?
- Products command premium prices and lead to a best-in-class gross margin of 66.5%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 36.5%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Philip Morris is trading at $188.57 per share, or 22.2x forward P/E. Is now the right time to buy? 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.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week - FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
