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 is one S&P 500 stock that is leading the market forward and two that could be in trouble.
Two Stocks to Sell:
Dollar General (DG)
Market Cap: $31.59 billion
Appealing to the budget-conscious consumer, Dollar General (NYSE: DG) is a discount retailer that sells a wide range of household essentials, groceries, apparel/beauty products, and seasonal merchandise.
Why Are We Hesitant About DG?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations
- Widely-available products (and therefore stiff competition) result in an inferior gross margin of 30% that must be offset through higher volumes
- Earnings per share have contracted by 17.4% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
Dollar General is trading at $143 per share, or 20.6x forward P/E. Check out our free in-depth research report to learn more about why DG doesn’t pass our bar.
Henry Schein (HSIC)
Market Cap: $8.87 billion
With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ: HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.
Why Is HSIC Not Exciting?
- 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
- 2.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
At $75.32 per share, Henry Schein trades at 14.5x forward P/E. To fully understand why you should be careful with HSIC, check out our full research report (it’s free).
One Stock to Buy:
Amphenol (APH)
Market Cap: $177.4 billion
With over 90 years of connecting the world's technologies, Amphenol (NYSE: APH) designs and manufactures connectors, cables, sensors, and interconnect systems that enable electrical and electronic connections across virtually every industry.
Why Are We Bullish on APH?
- Market share has increased this cycle as its 35.6% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 49% annual growth in its earnings per share outpaced its revenue
- Strong free cash flow margin of 15.7% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
Amphenol’s stock price of $146 implies a valuation ratio of 32.9x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 244% over the last five years (as of June 30, 2025).
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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
