The S&P 500 (^GSPC) is home to the biggest and most well-known companies in the market, making it a go-to index for investors seeking stability. But not all large-cap stocks are created equal - some are struggling with slowing growth, declining margins, or increased competition.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here are two S&P 500 stocks leading the market forward and one that may struggle.
One Stock to Sell:
Lennar (LEN)
Market Cap: $23.32 billion
One of the largest homebuilders in America, Lennar (NYSE: LEN) is known for constructing affordable, move-up, and retirement homes across a range of markets and communities.
Why Should You Dump LEN?
- Demand cratered as it couldn’t win new orders over the past two years, leading to an average 9.2% decline in its backlog
- Earnings per share fell by 8.9% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $94 per share, Lennar trades at 14.1x forward P/E. Dive into our free research report to see why there are better opportunities than LEN.
Two Stocks to Watch:
PTC (PTC)
Market Cap: $13.67 billion
Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ: PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.
Why Are We Bullish on PTC?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 21% over the last year
- Software is difficult to replicate at scale and leads to a premier gross margin of 84.7%
- Healthy operating margin of 38.7% shows it’s a well-run company with efficient processes, and it turbocharged its profits by achieving some fixed cost leverage
PTC’s stock price of $116.84 implies a valuation ratio of 5x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
AbbVie (ABBV)
Market Cap: $397.1 billion
Born from a 2013 spinoff of Abbott Laboratories' pharmaceutical business, AbbVie (NYSE: ABBV) is a biopharmaceutical company that develops and markets medications for autoimmune diseases, cancer, neurological disorders, and other complex health conditions.
Why Do We Like ABBV?
- Enormous revenue base of $62.82 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- ROIC punches in at 17.5%, illustrating management’s expertise in identifying profitable investments
AbbVie is trading at $252.95 per share, or 16.3x forward P/E. Is now the right time to buy? Find out in our full 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.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
