The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.
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 are two S&P 500 stocks leading the market forward and one that may struggle.
One Stock to Sell:
Verizon (VZ)
Market Cap: $201.6 billion
Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE: VZ) is a telecom giant providing a range of communications and internet services.
Why Do We Steer Clear of VZ?
- Annual sales growth of 1.4% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Low free cash flow margin of 14.9% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Verizon’s stock price of $48.20 implies a valuation ratio of 1.4x forward price-to-sales. Check out our free in-depth research report to learn more about why VZ doesn’t pass our bar.
Two Stocks to Watch:
Nasdaq (NDAQ)
Market Cap: $51.13 billion
Originally founded in 1971 as the world's first electronic stock market, Nasdaq (NASDAQ: NDAQ) operates global exchanges and provides technology, data, and corporate services that help companies, investors, and financial institutions navigate capital markets.
Why Do We Watch NDAQ?
- Market share has increased this cycle as its 15% annual revenue growth over the last two years was exceptional
- Earnings growth was above the peer group average over the last two years as its EPS compounded at 14.8% annually
- Industry-leading 15.6% return on equity demonstrates management’s skill in finding high-return investments
At $90.34 per share, Nasdaq trades at 22.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Motorola Solutions (MSI)
Market Cap: $66.44 billion
Born from the company that invented the first portable handheld police radio in 1940, Motorola Solutions (NYSE: MSI) provides mission-critical communications, video security, and command center software solutions for public safety agencies and enterprise customers.
Why Should You Buy MSI?
- Annual revenue growth of 9.5% over the past five years was outstanding, reflecting market share gains this cycle
- Adjusted 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 improved cash conversion implies it’s becoming a less capital-intensive business
Motorola Solutions is trading at $404.20 per share, or 23x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
