While the S&P 500 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.
Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here is one S&P 500 stock that could deliver good returns and two that may struggle.
Two Stocks to Sell:
onsemi (ON)
Market Cap: $14.43 billion
Spun out of Motorola in 1999 and built through a series of acquisitions, onsemi (NASDAQ:ON) is a global provider of analog chips specializing in autos, industrial applications, and power management in cloud data centers.
Why Are We Cautious About ON?
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Customers postponed purchases of its products and services this cycle as its revenue declined by 7.8% annually over the last two years
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Projected sales decline of 16.9% over the next 12 months indicates demand will continue deteriorating
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Low free cash flow margin of 10.5% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
onsemi is trading at $34.62 per share, or 8.4x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than ON .
Conagra (CAG)
Market Cap: $11.89 billion
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE:CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Do We Pass on CAG?
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Shrinking unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
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Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
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Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 7.9 percentage points
At $24.90 per share, Conagra trades at 10.2x forward price-to-earnings. Read our free research report to see why you should think twice about including CAG in your portfolio, it’s free .
One Stock to Buy:
Eli Lilly (LLY)
Market Cap: $659.9 billion
Founded in 1876 by a Civil War veteran and pharmacist who was frustrated with the poor quality of medicines available at the time, Eli Lilly (NYSE:LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
Why Will LLY Beat the Market?
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Impressive 25.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
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Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
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Industry-leading 27.3% return on capital demonstrates management’s skill in finding high-return investments
Eli Lilly’s stock price of $821.06 implies a valuation ratio of 30.6x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free .
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 .
