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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here are two S&P 500 stocks that could deliver good returns and one that may struggle.
One Stock to Sell:
Generac (GNRC)
Market Cap: $11 billion
With its name deriving from a combination of “generating” and “AC”, Generac (NYSE: GNRC) offers generators and other power products for residential, industrial, and commercial use.
Why Is GNRC Not Exciting?
- 5.1% annual revenue growth over the last two years was slower than its industrials peers
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 6.7 percentage points
- Earnings per share have contracted by 1.9% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
Generac’s stock price of $185.10 implies a valuation ratio of 19.2x forward P/E. Check out our free in-depth research report to learn more about why GNRC doesn’t pass our bar.
Two Stocks to Buy:
Reddit (RDDT)
Market Cap: $28.17 billion
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Why Will RDDT Outperform?
- Domestic Daily Active Visitors are rising, meaning the company can increase revenue without incurring additional customer acquisition costs if it can cross-sell additional products and features
- Grip over its ecosystem is highlighted by its ability to grow engagement while increasing the average revenue per user by 47.1% annually
- Robust free cash flow margin of 31.8% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
Reddit is trading at $146.48 per share, or 15.5x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Cencora (COR)
Market Cap: $61.7 billion
Formerly known as AmerisourceBergen until its 2023 rebranding, Cencora (NYSE: COR) is a global pharmaceutical distribution company that connects manufacturers with healthcare providers while offering logistics, data analytics, and consulting services.
Why Will COR Beat the Market?
- Enormous revenue base of $332.8 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 14.4% exceeded its revenue gains over the last five years
- ROIC punches in at 50.2%, illustrating management’s expertise in identifying profitable investments
At $325.25 per share, Cencora trades at 16.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
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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.
