The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here is one S&P 500 stock that could deliver good returns and two that could be in trouble.
Two Stocks to Sell:
Tractor Supply (TSCO)
Market Cap: $26.63 billion
Started as a mail-order tractor parts business, Tractor Supply (NASDAQ: TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.
Why Does TSCO Give Us Pause?
- The company has faced growth challenges as its 3% annual revenue increases over the last three years fell short of other consumer retail companies
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 36.3% that must be offset through higher volumes
Tractor Supply is trading at $50.49 per share, or 23.7x forward P/E. If you’re considering TSCO for your portfolio, see our FREE research report to learn more.
Deere (DE)
Market Cap: $165.9 billion
Revolutionizing agriculture with the first self-polishing cast-steel plow in the 1800s, Deere (NYSE: DE) manufactures and distributes advanced agricultural, construction, forestry, and turf care equipment.
Why Does DE Fall Short?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 12.3% annually over the last two years
- Eroding returns on capital suggest its historical profit centers are aging
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $614.90 per share, Deere trades at 32.7x forward P/E. Read our free research report to see why you should think twice about including DE in your portfolio.
One Stock to Watch:
UnitedHealth (UNH)
Market Cap: $265 billion
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Do We Like UNH?
- Products and services resonate with customers, evidenced by its respectable 11.7% annualized sales growth over the last five years
- Enormous revenue base of $447.6 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- ROIC punches in at 19.6%, illustrating management’s expertise in identifying profitable investments
UnitedHealth’s stock price of $291.70 implies a valuation ratio of 16.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
