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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here is one S&P 500 stock that is positioned to outperform and two that may struggle.
Two Stocks to Sell:
Starbucks (SBUX)
Market Cap: $90.5 billion
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Why Is SBUX Risky?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
- Estimated sales growth of 3.1% for the next 12 months implies demand will slow from its six-year trend
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 7.1 percentage points
At $81.80 per share, Starbucks trades at 33x forward P/E. Check out our free in-depth research report to learn more about why SBUX doesn’t pass our bar.
Equifax (EFX)
Market Cap: $25.51 billion
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE: EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Why Are We Hesitant About EFX?
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 5.3 percentage points
- Incremental sales over the last five years were less profitable as its 3.7% annual earnings per share growth lagged its revenue gains
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its falling returns suggest its earlier profit pools are drying up
Equifax is trading at $208.85 per share, or 24.6x forward P/E. Dive into our free research report to see why there are better opportunities than EFX.
One Stock to Buy:
Hubbell (HUBB)
Market Cap: $24.42 billion
A respected player in the electrical segment, Hubbell (NYSE: HUBB) manufactures electronic products for the construction, industrial, utility, and telecommunications markets.
Why Is HUBB a Top Pick?
- Operating margin improvement of 7.6 percentage points over the last five years demonstrates its ability to scale efficiently
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Free cash flow margin increased by 5.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Hubbell’s stock price of $469.83 implies a valuation ratio of 23.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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