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 positioned to outperform and one that could be in trouble.
One Stock to Sell:
United Airlines (UAL)
Market Cap: $30.03 billion
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Do We Think UAL Will Underperform?
- Sluggish trends in its revenue passenger miles suggest customers aren’t adopting its solutions as quickly as the company hoped
- Poor expense management has led to an operating margin of 9.1% that is below the industry average
- Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 5.5 percentage points
United Airlines’s stock price of $92.41 implies a valuation ratio of 10x forward P/E. To fully understand why you should be careful with UAL, check out our full research report (it’s free).
Two Stocks to Watch:
Yum! Brands (YUM)
Market Cap: $43.73 billion
Spun off as an independent company from PepsiCo, Yum! Brands (NYSE: YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.
Why Does YUM Stand Out?
- Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
- Excellent operating margin of 31.4% highlights the efficiency of its business model
- Robust free cash flow margin of 19.1% gives it many options for capital deployment
Yum! Brands is trading at $158.38 per share, or 23.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Altria (MO)
Market Cap: $124.5 billion
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Do We Like MO?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 85.9%
- Highly efficient business model is illustrated by its impressive 52.7% operating margin, and its profitability increased over the last year as it eliminated unnecessary expenses
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $74.38 per share, Altria trades at 12.7x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
