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 positioned to outperform and one that could be in trouble.
One stock to sell:
ExxonMobil (XOM)
Market cap: $723.9 billion
One of the successor companies to John D. Rockefeller's Standard Oil monopoly that was broken up in 1911, ExxonMobil (NYSE: XOM) explores for and produces crude oil and natural gas, refines and sells petroleum products, and manufactures petrochemicals.
Why Are We Wary of XOM?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 9.9% for the last five years
- Costly operations and weak unit economics result in an inferior gross margin of 43.6% that must be offset through higher production volumes
- Expenses have increased as a percentage of revenue over the last five years as its EBITDA margin fell by 2 percentage points
ExxonMobil’s stock price of $177.20 implies a valuation ratio of 12.6x forward P/E. Read our free research report to see why you should think twice about including XOM in your portfolio.
Two stocks to watch:
Allegion (ALLE)
Market cap: $15.97 billion
Allegion plc (NYSE: ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.
Why Should You Buy ALLE?
- Healthy operating margin of 20.1% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last five years
- Strong free cash flow margin of 15.1% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $189.37 per share, Allegion trades at 19.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Elevance Health (ELV)
Market cap: $89.39 billion
Formerly known as Anthem until its 2022 rebranding, Elevance Health (NYSE: ELV) is one of America's largest health insurers, serving approximately 47 million medical members through its network-based managed care plans.
Why Do We Like ELV?
- Products and services resonate with customers, evidenced by its respectable 8.5% annualized sales growth over the last five years
- Enormous revenue base of $199.1 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- ROIC punches in at 25.3%, illustrating management’s expertise in identifying profitable investments
Elevance Health is trading at $407.60 per share, or 14.4x forward P/E. Is now the right time to buy? See for yourself in our comprehensive 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
