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. Keeping that in mind, here are two S&P 500 stocks leading the market forward and one that could be in trouble.
One Stock to Sell:
Lowe's (LOW)
Market Cap: $126 billion
Founded in North Carolina as Lowe's North Wilkesboro Hardware, the company is a home improvement retailer that sells everything from paint to tools to building materials.
Why Is LOW Not Exciting?
- Recent store closures and weak same-store sales point to soft demand and an operational restructuring
- Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new locations
- Demand is forecasted to shrink as its estimated sales for the next 12 months are flat
Lowe's is trading at $225.96 per share, or 18.1x forward P/E. Read our free research report to see why you should think twice about including LOW in your portfolio.
Two Stocks to Watch:
Wabtec (WAB)
Market Cap: $32.65 billion
Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE: WAB) provides equipment, systems, and related software for the railway industry.
Why Are We Fans of WAB?
- Average organic revenue growth of 9.5% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Operating margin expanded by 6.3 percentage points over the last five years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 25.5% exceeded its revenue gains over the last two years
At $190.79 per share, Wabtec trades at 21.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Lennox (LII)
Market Cap: $19.98 billion
Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Does LII Catch Our Eye?
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Earnings per share have massively outperformed its peers over the last two years, increasing by 24.3% annually
- ROIC punches in at 50.4%, illustrating management’s expertise in identifying profitable investments
Lennox’s stock price of $562.92 implies a valuation ratio of 23.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free.
