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 is one S&P 500 stock that is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
RTX (RTX)
Market Cap: $251 billion
Originally focused on refrigeration technology, Raytheon (NSYE:RTX) provides a a variety of products and services to the aerospace and defense industries.
Why Are We Wary of RTX?
- Estimated sales growth of 5.2% for the next 12 months implies demand will slow from its two-year trend
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
RTX’s stock price of $187.79 implies a valuation ratio of 29x forward P/E. Dive into our free research report to see why there are better opportunities than RTX.
BD (BDX)
Market Cap: $58.46 billion
With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE: BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.
Why Are We Hesitant About BDX?
- Annual sales growth of 5.7% over the last five years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.6 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively
BD is trading at $205.18 per share, or 13.6x forward P/E. Read our free research report to see why you should think twice about including BDX in your portfolio.
One Stock to Buy:
Cintas (CTAS)
Market Cap: $76.08 billion
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Will CTAS Outperform?
- Market share has increased this cycle as its 9.3% annual revenue growth over the last five years was exceptional
- Share repurchases over the last five years enabled its annual earnings per share growth of 15.6% to outpace its revenue gains
- Strong free cash flow margin of 16.2% enables it to reinvest or return capital consistently
At $190.10 per share, Cintas trades at 36.3x 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
Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
