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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 could deliver good returns and two that could be in trouble.
Two Stocks to Sell:
Disney (DIS)
Market Cap: $166.9 billion
Founded by brothers Walt and Roy, Disney (NYSE:DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.
Why Do We Steer Clear of DIS?
・Annual sales growth of 10.8% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
・Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 9.4% for the last two years
・Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $96.32 per share, Disney trades at 13x forward P/E. Check out our free in-depth research report to learn more about why DIS doesn’t pass our bar.
CoStar (CSGP)
Market Cap: $11.64 billion
With a research department that makes over 10,000 property updates daily to its 35-year-old database, CoStar Group (NASDAQ:CSGP) provides comprehensive real estate data, analytics, and online marketplaces for commercial and residential properties in the U.S. and U.K.
Why Does CSGP Give Us Pause?
・Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.6% annually
・Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 17.4 percentage points
・Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results
CoStar’s stock price of $28.85 implies a valuation ratio of 20.2x forward P/E. Read our free research report to see why you should think twice about including CSGP in your portfolio.
One Stock to Watch:
McDonald's (MCD)
Market Cap: $187.5 billion
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE:MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
Why Does MCD Stand Out?
・Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
・Asset-lite franchise model is reflected in its superior unit economics and a best-in-class gross margin of 57.1%
・MCD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
McDonald's is trading at $264.15 per share, or 20.4x 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 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
