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 may struggle.
Two Stocks to Sell:
Carrier Global (CARR)
Market Cap: $50.07 billion
Founded by the inventor of air conditioning, Carrier Global (NYSE: CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.
Why Does CARR Worry Us?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.3 percentage points
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Carrier Global’s stock price of $59.29 implies a valuation ratio of 17.9x forward P/E. Dive into our free research report to see why there are better opportunities than CARR.
CSX (CSX)
Market Cap: $63.4 billion
Established as part of the Chessie System and Seaboard Coast Line Industries merger, CSX (NASDAQ: CSX) is a transportation company specializing in freight rail services.
Why Should You Dump CSX?
- Flat unit sales over the past two years imply it may need to invest in improvements to get back on track
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 8.4% annually, worse than its revenue
- Free cash flow margin dropped by 21.5 percentage points over the last five years, implying the company became more capital intensive as competition picked up
CSX is trading at $34.12 per share, or 18.9x forward P/E. To fully understand why you should be careful with CSX, check out our full research report (it’s free).
One Stock to Watch:
Qualcomm (QCOM)
Market Cap: $181.6 billion
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ: QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Why Are We Fans of QCOM?
- Annual revenue growth of 16.6% over the last five years was superb and indicates its market share increased during this cycle
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- ROIC punches in at 51.2%, illustrating management’s expertise in identifying profitable investments
At $169.02 per share, Qualcomm trades at 14.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Strong Momentum Stocks for this week. 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-small-cap company Comfort Systems (+782% 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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