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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here are two S&P 500 stocks that could deliver good returns and one that could be in trouble.
One Stock to Sell:
CVS Health (CVS)
Market Cap: $85.83 billion
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE: CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Does CVS Worry Us?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 7% over the last two years was below our standards for the healthcare sector
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 2.9% annually
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.2 percentage points
CVS Health is trading at $67.98 per share, or 11x forward P/E. If you’re considering CVS for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Intuit (INTU)
Market Cap: $183.4 billion
Created in 1983 when founder Scott Cook watched his wife struggle to reconcile the family's checkbook, Intuit provides tax and accounting software for small and medium-sized businesses.
Why Does INTU Stand Out?
- Billings have averaged 15% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Strong free cash flow margin of 32.8% enables it to reinvest or return capital consistently
Intuit’s stock price of $655.31 implies a valuation ratio of 9.6x forward price-to-sales. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
UnitedHealth (UNH)
Market Cap: $349.7 billion
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Will UNH Beat the Market?
- Unparalleled scale of $410.1 billion in revenue enables it to spread administrative costs across a larger membership base
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 21.6% return on capital demonstrates management’s skill in finding high-return investments
At $385.57 per share, UnitedHealth trades at 12.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.
