The S&P 500 (^GSPC) is often seen as a benchmark for strong businesses, but that doesn’t mean every stock is worth owning. Some companies face significant challenges, whether it’s stagnating growth, heavy debt, or disruptive new competitors.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here is one S&P 500 stock that could deliver good returns and two that could be in trouble.

Two Industrials Stocks to Sell:

Parker-Hannifin (PH)

Market Cap: $90.99 billion

Founded in 1917, Parker Hannifin (NYSE: PH) is a manufacturer of motion and control systems for a wide variety of mobile, industrial and aerospace markets.

Why Are We Cautious About PH?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Estimated sales growth of 2.2% for the next 12 months implies demand will slow from its two-year trend
3. Free cash flow margin shrank by 2.5 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

At $711.51 per share, Parker-Hannifin trades at 25x forward P/E. To fully understand why you should be careful with PH, check out our full research report (it’s free).

Honeywell (HON)

Market Cap: $138.2 billion

Originally founded in 1906 as a thermostat company, Honeywell (NASDAQ: HON) is a multinational conglomerate known for its aerospace systems, building technologies, performance materials, and safety and productivity solutions.

Why Do We Think Twice About HON?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Projected sales growth of 4.7% for the next 12 months suggests sluggish demand
3. Free cash flow margin dropped by 2.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up

Honeywell’s stock price of $217.75 implies a valuation ratio of 20.3x forward P/E. Check out our free in-depth research report to learn more about why HON doesn’t pass our bar.

One Industrials Stock to Watch:

Waste Management (WM)

Market Cap: $92.2 billion

Headquartered in Houston, Waste Management (NYSE: WM) is a provider of comprehensive waste management services in North America.

Why Do We Like WM?

1. Solid 9.7% annual revenue growth over the last five years indicates its offering’s solve complex business issues
2. Offerings are difficult to replicate at scale and result in a top-tier gross margin of 38.6%
3. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 17.4%

Waste Management is trading at $228.99 per share, or 28.2x 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

Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.

Take advantage of the rebound by checking out our Top 5 Strong Momentum Stocks for this week. 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today for free.

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