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 is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
Microchip Technology (MCHP)
Market Cap: $35.38 billion
Spun out from General Instrument in 1987, Microchip Technology (NASDAQ: MCHP) is a leading provider of microcontrollers and integrated circuits used mainly in the automotive world, especially in electric vehicles and their charging devices.
Why Should You Sell MCHP?
- Customers postponed purchases of its products and services this cycle as its revenue declined by 4.2% annually over the last five years
- Operating profits fell over the last five years as its sales dropped and it struggled to adjust its fixed costs
- Free cash flow margin shrank by 15.8 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Microchip Technology is trading at $66 per share, or 37.9x forward P/E. Check out our free in-depth research report to learn more about why MCHP doesn’t pass our bar.
Assurant (AIZ)
Market Cap: $10.55 billion
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE: AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Why Are We Hesitant About AIZ?
- 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 4.4% for the last five years
- Outsized scale creates growth headwinds as its 4.7% annualized net premiums earned increases over the last five years underperformed other financial institutions
- Scale is a double-edged sword because it limits the firm’s capital growth potential compared to its smaller competitors, as reflected in its below-average annual book value per share increases of 1.4% for the last five years
At $209.14 per share, Assurant trades at 1.9x forward P/B. If you’re considering AIZ for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
DexCom (DXCM)
Market Cap: $31.69 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 Will DXCM Outperform?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 17.8% over the past two years
- Earnings per share grew by 17.5% annually over the last five years, massively outpacing its peers
- Free cash flow margin increased by 8.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
DexCom’s stock price of $81.52 implies a valuation ratio of 34.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 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-small-cap company Exlservice (+354% 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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