The S&P 500 (^GSPC) is full of established businesses, but only some continue to outperform the market. A few standout companies are thriving thanks to strong fundamentals and sustained competitive advantages.

Not every big company is a great investment, and we’re here to help you find the best opportunities. Keeping that in mind, here are three S&P 500 stocks positioned to outperform.

Tractor Supply (TSCO)

Market Cap: $32.33 billion

Started as a mail-order tractor parts business, Tractor Supply (NASDAQ: TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.

Why Is TSCO Interesting?

1. Bold push to open new stores demonstrates an ambitious strategy to establish itself in underpenetrated territories
2. Estimated revenue growth of 6.7% for the next 12 months implies its momentum over the last six years will continue
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

Tractor Supply’s stock price of $61.29 implies a valuation ratio of 27.7x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Altria (MO)

Market Cap: $113.7 billion

Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.

Why Are We Fans of MO?

1. Products command premium prices and result in a best-in-class gross margin of 70.7%
2. Healthy operating margin of 54.6% shows it’s a well-run company with efficient processes
3. Strong free cash flow margin of 43.3% enables it to reinvest or return capital consistently

At $67.75 per share, Altria trades at 12.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Deckers (DECK)

Market Cap: $15.53 billion

Established in 1973, Deckers (NYSE: DECK) is a footwear and apparel conglomerate with a portfolio of lifestyle and performance brands.

Why Are We Positive On DECK?

1. Average constant currency growth of 18.2% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
2. Free cash flow margin is forecasted to grow by 2.3 percentage points in the coming year, potentially giving the company more chips to play with
3. Improving returns on capital reflect management’s ability to monetize investments

Deckers is trading at $104.75 per share, or 17.3x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

High-Quality Stocks for All Market Conditions

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