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.
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 is one S&P 500 stock that is leading the market forward and two best left off your watchlist.
Two Stocks to Sell:
Brown-Forman (BF.B)
Market Cap: $13.43 billion
Best known for its Jack Daniel’s whiskey, Brown-Forman (NYSE:BF.B) is an alcoholic beverage company with a broad portfolio of brands in wines and spirits.
Why Are We Wary of BF.B?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Projected sales decline of 3% for the next 12 months points to an even tougher demand environment ahead
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 6 percentage points
Brown-Forman’s stock price of $28.32 implies a valuation ratio of 14.6x forward P/E. If you’re considering BF.B for your portfolio, see our FREE research report to learn more.
Sherwin-Williams (SHW)
Market Cap: $87.91 billion
Widely known for its success in the paint industry, Sherwin-Williams (NYSE:SHW) is a manufacturer of paints, coatings, and related products.
Why Does SHW Give Us Pause?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Anticipated sales growth of 2.4% for the next year implies demand will be shaky
- Free cash flow margin shrank by 8.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Sherwin-Williams is trading at $351.62 per share, or 28.6x forward P/E. To fully understand why you should be careful with SHW, check out our full research report (it’s free).
One Stock to Watch:
Republic Services (RSG)
Market Cap: $75.16 billion
Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.
Why Is RSG Interesting?
- Annual revenue growth of 9.3% over the last five years beat the sector average and underscores the unique value of its offerings
- Healthy operating margin of 18.6% shows it’s a well-run company with efficient processes, and its profits increased over the last five years as it scaled
- Strong free cash flow margin of 13.5% enables it to reinvest or return capital consistently
At $240.50 per share, Republic Services trades at 34.3x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. 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-small-cap company Exlservice (+354% 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
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