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 are two S&P 500 stocks positioned to outperform and one that could be in trouble.

One Stock to Sell:

Kraft Heinz (KHC)

Market Cap: $30.45 billion

The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.

Why Are We Out on KHC?

1. Falling unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
2. Forecasted revenue decline of 1.6% for the upcoming 12 months implies demand will fall off a cliff
3. Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 11.2 percentage points

At $25.80 per share, Kraft Heinz trades at 9.6x forward P/E. To fully understand why you should be careful with KHC, check out our full research report (it’s free).

Two Stocks to Watch:

Paychex (PAYX)

Market Cap: $49.73 billion

One of the oldest service providers in the industry, Paychex (NASDAQ: PAYX) offers its customers payroll and HR software solutions.

Why Do We Like PAYX?

1. Estimated revenue growth of 18.7% for the next 12 months implies demand will accelerate from its three-year trend
2. Highly efficient business model is illustrated by its impressive 39.6% operating margin
3. PAYX is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

Paychex’s stock price of $139.35 implies a valuation ratio of 7.6x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.

DexCom (DXCM)

Market Cap: $33.2 billion

Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.

Why Are We Backing DXCM?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 19.2% over the past two years
2. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 23.2% outpaced its revenue gains
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

DexCom is trading at $84.78 per share, or 39.5x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth 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 6 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-micro-cap company Tecnoglass (+1,754% 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