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. That said, here is one S&P 500 stock that could deliver good returns and two best left off your watchlist.
Two Stocks to Sell:
Citizens Financial Group (CFG)
Market Cap: $25.55 billion
Tracing its roots back to 1828 as a community-focused institution, Citizens Financial Group (NYSE: CFG) is a regional bank that provides retail and commercial banking services to individuals, small businesses, and large corporations across 14 states.
Why Are We Wary of CFG?
- Muted 2.6% annual revenue growth over the last two years shows its demand lagged behind its banking peers
- Annual net interest income growth of 5.8% over the last five years was below our standards for the banking sector
- Incremental sales over the last five years were less profitable as its 2.5% annual earnings per share growth lagged its revenue gains
At $60.10 per share, Citizens Financial Group trades at 1x forward P/B. To fully understand why you should be careful with CFG, check out our full research report (it’s free).
PulteGroup (PHM)
Market Cap: $21.52 billion
Having delivered over 850,000 homes since its founding in 1950, PulteGroup (NYSE: PHM) is one of America's largest homebuilders, constructing single-family homes, townhouses, and condominiums for first-time, move-up, and active adult buyers across 46 markets in 25 states.
Why Are We Hesitant About PHM?
- 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 1.2% for the last two years
- Earnings per share have contracted by 7.7% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Waning returns on capital imply its previous profit engines are losing steam
PulteGroup’s stock price of $113.74 implies a valuation ratio of 11.2x forward P/E. Check out our free in-depth research report to learn more about why PHM doesn’t pass our bar.
One Stock to Buy:
McKesson (MCK)
Market Cap: $88.61 billion
With roots dating back to 1833, making it one of America's oldest continuously operating businesses, McKesson (NYSE: MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
Why Will MCK Beat the Market?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 14.3% annual sales growth over the last two years
- Unparalleled scale of $403.4 billion in revenue gives it negotiating leverage and staying power in an industry with high barriers to entry
- Share buybacks catapulted its annual earnings per share growth to 17.9%, which outperformed its revenue gains over the last five years
McKesson is trading at $734.54 per share, or 16.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
