While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.

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 could deliver good returns and two that could be in trouble.

Two Stocks to Sell:

Walmart (WMT)

Market Cap: $761.3 billion

Known for its large-format Supercenters, Walmart (NYSE:WMT) is a retail pioneer that serves a budget-conscious consumer who is looking for a wide range of products under one roof.

Why Does WMT Fall Short?

1. Sizable revenue base leads to growth challenges as its 5.4% annual revenue increases over the last five years fell short of other consumer retail companies
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 24.6% that must be offset through higher volumes
3. Subpar operating margin of 4.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats

At $94.70 per share, Walmart trades at 34.5x forward price-to-earnings. Check out our free in-depth research report to learn more about why WMT doesn’t pass our bar.

Emerson Electric (EMR)

Market Cap: $56.99 billion

Founded in 1890, Emerson Electric (NYSE:EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.

Why Does EMR Worry Us?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last five years
2. Estimated sales growth of 4.7% for the next 12 months implies demand will slow from its two-year trend
3. Waning returns on capital imply its previous profit engines are losing steam

Emerson Electric is trading at $101.08 per share, or 16.7x forward price-to-earnings. To fully understand why you should be careful with EMR, check out our full research report (it’s free).

One Stock to Buy:

Quanta (PWR)

Market Cap: $40.67 billion

A construction engineering services company, Quanta (NYSE:PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.

Why Should You Buy PWR?

1. Sales pipeline is in good shape as its backlog averaged 23.8% growth over the past two years
2. Projected revenue growth of 13.5% for the next 12 months suggests its momentum from the last two years will persist
3. Earnings per share grew by 18.6% annually over the last two years and trumped its peers

Quanta’s stock price of $275.31 implies a valuation ratio of 26.5x forward price-to-earnings. Is now the time to initiate a position? Find out in our full research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio 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 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.