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 are two S&P 500 stocks that could deliver good returns and one best left off your watchlist.
One Stock to Sell:
Best Buy (BBY)
Market Cap: $13.64 billion
With humble beginnings as a stereo equipment seller, Best Buy (NYSE: BBY) now sells a broad selection of consumer electronics, appliances, and home office products.
Why Do We Steer Clear of BBY?
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Commoditized inventory, bad unit economics, and high competition are reflected in its low gross margin of 22.5%
- Poor expense management has led to an operating margin of 3% that is below the industry average
Best Buy’s stock price of $64.97 implies a valuation ratio of 9.8x forward P/E. If you’re considering BBY for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Teledyne (TDY)
Market Cap: $29.12 billion
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE: TDY) offers digital imaging and instrumentation products for various industries.
Why Could TDY Be a Winner?
- Market share has increased this cycle as its 14.7% annual revenue growth over the last five years was exceptional
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
Teledyne is trading at $620.18 per share, or 26.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Marsh & McLennan (MRSH)
Market Cap: $91.27 billion
With roots dating back to 1871 and a presence in over 130 countries, Marsh & McLennan (NYSE: MMC) is a global professional services firm that helps organizations manage risk, strategy, and workforce challenges through its four specialized businesses.
Why Is MRSH a Top Pick?
- Annual revenue growth of 9.4% over the past five years was outstanding, reflecting market share gains this cycle
- Unparalleled revenue scale of $26.98 billion gives it an edge in distribution
- MRSH is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $186.00 per share, Marsh & McLennan trades at 18.1x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our 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 244% over the last five years (as of June 30, 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
