While the S&P 500 (^GSPC) 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.
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 that could deliver good returns and one that may struggle.
One Stock to Sell:
Cisco (CSCO)
Market Cap: $287.3 billion
Founded in 1984 by a husband and wife team who wanted computers at Stanford to talk to computers at UC Berkeley, Cisco (NASDAQ: CSCO) designs and sells networking equipment, security solutions, and collaboration tools that help businesses connect their systems and secure their digital operations.
Why Is CSCO Not Exciting?
- Sales were flat over the last two years, indicating it’s failed to expand this cycle
- 6.2 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
- Waning returns on capital imply its previous profit engines are losing steam
Cisco’s stock price of $72.70 implies a valuation ratio of 18x forward P/E. Dive into our free research report to see why there are better opportunities than CSCO.
Two Stocks to Watch:
Datadog (DDOG)
Market Cap: $54.78 billion
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Should You Buy DDOG?
- Ability to secure long-term commitments with customers is evident in its 26% ARR growth over the last year
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $160.90 per share, Datadog trades at 15.5x forward price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Cigna (CI)
Market Cap: $65.96 billion
With roots dating back to 1792 and serving millions of customers across the globe, The Cigna Group (NYSE: CI) provides healthcare services through its Evernorth Health Services and Cigna Healthcare segments, offering pharmacy benefits, specialty care, and medical plans.
Why Do We Like CI?
- Impressive 18.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Unparalleled scale of $268 billion in revenue enables it to spread administrative costs across a larger membership base
- Earnings per share have outperformed the peer group average over the last five years, increasing by 8.1% annually
Cigna is trading at $248.80 per share, or 7.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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