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.

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 are two S&P 500 stocks that could deliver good returns and one that may struggle.

One Stock to Sell:

Textron (TXT)

Market Cap: $14.05 billion

Listed on the NYSE in 1947, Textron (NYSE: TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.

Why Does TXT Worry Us?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 6.7%
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.2 percentage points

At $78.50 per share, Textron trades at 12.4x forward P/E. Dive into our free research report to see why there are better opportunities than TXT.

Two Stocks to Watch:

Apple (AAPL)

Market Cap: $2.98 trillion

Creator of the iPhone and App Store, Apple (NASDAQ: AAPL) is a legendary developer of consumer electronics and software.

Why Could AAPL Be a Winner?

1. Apple's revenue base is so large because nearly everyone in the U.S. has an iPhone, but this is a double-edged sword. Growth must now come from upgrades, a harder pitch that has resulted in sluggish top-line performance recently.
2. Still, Apple's devices have endured for decades, speaking to its brand, design ethos, and technological chops. Its success is rare in the world of consumer electronics, which is fraught because of commoditization, competition, and obsolescence risk.
3. The company may not have the best gross margin because of its hardware orientation, but it still manages to produce elite operating and free cash flow margins. This shows it doesn’t need over-the-top marketing campaigns to convince people to buy its products.

Apple’s stock price of $198.57 implies a valuation ratio of 26.6x forward price-to-earnings. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

Nvidia (NVDA)

Market Cap: $3.54 trillion

Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ: NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.

Why Are We Backing NVDA?

1. Market share has increased this cycle as its 140% annual revenue growth over the last two years was exceptional
2. Share buybacks catapulted its annual earnings per share growth to 80.2%, which outperformed its revenue gains over the last five years
3. NVDA is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety

Nvidia is trading at $144.36 per share, or 30.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 ServiceNow (+178% 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.