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 is leading the market forward and two that may struggle.
Two Stocks to Sell:
CVS Health (CVS)
Market Cap: $90.7 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 Do We Think Twice About CVS?
- The company has faced growth challenges as its 6% 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
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 2.1% annually while its revenue grew
CVS Health is trading at $71.09 per share, or 10x forward P/E. Read our free research report to see why you should think twice about including CVS in your portfolio.
PulteGroup (PHM)
Market Cap: $22.73 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 Cautious About PHM?
- The company has faced growth challenges as its 3.8% annual revenue increases over the last two years fell short of other industrials companies
- Earnings per share have dipped by 1.4% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- Diminishing returns on capital suggest its earlier profit pools are drying up
PulteGroup’s stock price of $118.64 implies a valuation ratio of 11.2x forward P/E. To fully understand why you should be careful with PHM, check out our full research report (it’s free).
One Stock to Buy:
Merck (MRK)
Market Cap: $286 billion
With roots dating back to 1891 and a portfolio that includes the blockbuster cancer immunotherapy Keytruda, Merck (NYSE: MRK) develops and sells prescription medicines, vaccines, and animal health products across oncology, infectious diseases, cardiovascular, and other therapeutic areas.
Why Are We Backing MRK?
- Dominant market position is represented by its $65.09 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Adjusted operating margin improvement of 30.8 percentage points over the last two years demonstrates its ability to scale efficiently
- MRK is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $115.34 per share, Merck trades at 22.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.
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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.
