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. That said, here is one S&P 500 stock that could deliver good returns and two that could be in trouble.
Two Industrials Stocks to Sell:
Parker-Hannifin (PH)
Market Cap: $90.99 billion
Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.
Why Are We Cautious About PH?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Estimated sales growth of 2.2% for the next 12 months implies demand will slow from its two-year trend
- Free cash flow margin shrank by 2.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $711.51 per share, Parker-Hannifin trades at 25x forward P/E. To fully understand why you should be careful with PH, check out our full research report (it’s free).
Honeywell (HON)
Market Cap: $138.2 billion
Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ: HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.
Why Do We Think Twice About HON?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Projected sales growth of 4.7% for the next 12 months suggests sluggish demand
- Free cash flow margin dropped by 2.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up
Honeywell’s stock price of $217.75 implies a valuation ratio of 20.3x forward P/E. Check out our free in-depth research report to learn more about why HON doesn’t pass our bar.
One Industrials Stock to Watch:
Waste Management (WM)
Market Cap: $92.2 billion
Headquartered in Houston, Waste Management (NYSE: WM) is a provider of comprehensive waste management services in North America.
Why Do We Like WM?
- Solid 9.7% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Offerings are difficult to replicate at scale and result in a top-tier gross margin of 38.6%
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 17.4%
Waste Management is trading at $228.99 per share, or 28.2x 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
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
