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. Keeping that in mind, here is one S&P 500 stock that could deliver good returns and two best left off your watchlist.

Two Stocks to Sell:

McCormick (MKC)

Market Cap: $17.45 billion

The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE: MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.

Why Does MKC Fall Short?

1. Sales trends were unexciting over the last three years as its 2.1% annual growth was below the typical consumer staples company
2. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
3. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 1.9 percentage points

McCormick is trading at $65.04 per share, or 20.8x forward P/E. Read our free research report to see why you should think twice about including MKC in your portfolio.

Avery Dennison (AVY)

Market Cap: $13.45 billion

Founded as Kum Kleen Products, Avery Dennison (NYSE: AVY) is a manufacturer of adhesive materials, display graphics, and packaging products, serving various industries.

Why Is AVY Not Exciting?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Diminishing returns on capital suggest its earlier profit pools are drying up

At $174.07 per share, Avery Dennison trades at 17.1x forward P/E. Check out our free in-depth research report to learn more about why AVY doesn’t pass our bar.

One Stock to Watch:

PTC (PTC)

Market Cap: $21.1 billion

Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ: PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.

Why Could PTC Be a Winner?

1. Superior software functionality and low servicing costs lead to a stellar gross margin of 83.8%
2. Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
3. Healthy operating margin of 35.9% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year

PTC’s stock price of $176.11 implies a valuation ratio of 7.7x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

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