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. That said, here is one S&P 500 stock that could deliver good returns and two best left off your watchlist.
Two stocks to sell:
Brown-Forman (BF.B)
Market cap: $13.93 billion
Best known for its Jack Daniel’s whiskey, Brown-Forman (NYSE:BF.B) is an alcoholic beverage company with a broad portfolio of brands in wines and spirits.
Why Does BF.B Fall Short?
- Annual sales declines of 2.4% for the past three years show its products struggled to connect with the market
- Sales are projected to be flat over the next 12 months and imply weak demand
- Earnings per share have dipped by 2.1% annually over the past three years, which is concerning because stock prices follow EPS over the long term
Brown-Forman is trading at $30.20 per share, or 17x forward P/E. Read our free research report to see why you should think twice about including BF.B in your portfolio.
Hormel Foods (HRL)
Market cap: $11.82 billion
Best known for its SPAM brand, Hormel (NYSE:HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Why Do We Avoid HRL?
- Falling unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Gross margin of 16.1% is an output of its commoditized products
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
At $21.56 per share, Hormel Foods trades at 14x forward P/E. To fully understand why you should be careful with HRL, check out our full research report (it’s free).
One stock to buy:
EMCOR (EME)
Market cap: $29.89 billion
Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services
Why Is EME a Good Business?
- Market share has increased this cycle as its 18% annual revenue growth over the last two years was exceptional
- Share repurchases over the last two years enabled its annual earnings per share growth of 28.9% to outpace its revenue gains
- Returns on capital are climbing as management makes more lucrative bets
EMCOR’s stock price of $684.75 implies a valuation ratio of 17.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-quality stocks for all market conditions
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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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.