While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
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 could be in trouble.
Two Stocks to Sell:
Textron (TXT)
Market Cap: $14.06 billion
Listed on the NYSE in 1947, Textron (NYSE: TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.
Why Is TXT Not Exciting?
- 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 3% for the last two years
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.6 percentage points
At $79.19 per share, Textron trades at 12x forward P/E. Read our free research report to see why you should think twice about including TXT in your portfolio.
CME Group (CME)
Market Cap: $96.59 billion
Born from the Chicago Mercantile Exchange founded in 1898 as a butter and egg trading venue, CME Group (NASDAQ: CME) operates the world's largest derivatives marketplace where traders can buy and sell futures and options contracts across interest rates, equities, currencies, commodities, and more.
Why Are We Cautious About CME?
- Annual revenue growth of 5.4% over the last five years was below our standards for the financials sector
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 9.8% annually
CME Group is trading at $268.30 per share, or 23.6x forward P/E. Dive into our free research report to see why there are better opportunities than CME.
One Stock to Buy:
Cintas (CTAS)
Market Cap: $73.99 billion
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Are We Bullish on CTAS?
- Solid 8.5% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Share repurchases over the last five years enabled its annual earnings per share growth of 15.9% to outpace its revenue gains
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Cintas’s stock price of $185.91 implies a valuation ratio of 37.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. 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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