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.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are two S&P 500 stocks positioned to outperform and one best left off your watchlist.
One Stock to Sell:
Starbucks (SBUX)
Market Cap: $95.27 billion
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Why Does SBUX Fall Short?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 5.1 percentage points
- Incremental sales over the last six years were much less profitable as its earnings per share fell by 2.2% annually while its revenue grew
Starbucks’s stock price of $83.85 implies a valuation ratio of 31x forward P/E. To fully understand why you should be careful with SBUX, check out our full research report (it’s free).
Two Stocks to Watch:
Cardinal Health (CAH)
Market Cap: $36.04 billion
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Are We Positive On CAH?
- Enormous revenue base of $222.6 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- Projected revenue growth of 11.9% for the next 12 months indicates demand will rise above its two-year trend
- Earnings per share have outperformed the peer group average over the last five years, increasing by 8.6% annually
At $152.70 per share, Cardinal Health trades at 16.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Molina Healthcare (MOH)
Market Cap: $9.84 billion
Founded in 1980 as a provider for underserved communities in Southern California, Molina Healthcare (NYSE: MOH) provides managed healthcare services primarily to low-income individuals through Medicaid, Medicare, and Marketplace insurance programs across 21 states.
Why Do We Like MOH?
- Annual revenue growth of 19.7% over the last five years was superb and indicates its market share increased during this cycle
- Large revenue base of $43.41 billion gives it power over healthcare providers and plan holders
- Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 11.1% annually
Molina Healthcare is trading at $180.01 per share, or 7.8x forward P/E. Is now the right time to buy? Find out in our full 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-micro-cap company Kadant (+351% 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
