1 S&P 500 Stock for Long-Term Investors and 2 to Ignore

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 leading the market forward and two best left off your watchlist.

Two Stocks to Sell:

CSX (CSX)

Market Cap: $63.83 billion

Established as part of the Chessie System and Seaboard Coast Line Industries merger, CSX (NASDAQ:CSX) is a transportation company specializing in freight rail services.

Why Do We Avoid CSX?

1. Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its strategy
2. Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
3. 15.6 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

CSX’s stock price of $34.28 implies a valuation ratio of 18.6x forward P/E. If you’re considering CSX for your portfolio, see our FREE research report to learn more.

Generac (GNRC)

Market Cap: $8.78 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 Are We Out on GNRC?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 7.1 percentage points
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Generac is trading at $148.95 per share, or 18.3x forward P/E. Check out our free in-depth research report to learn more about why GNRC doesn’t pass our bar.

One Stock to Buy:

Eli Lilly (LLY)

Market Cap: $717.6 billion

Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE:LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.

Why Are We Backing LLY?

1. Annual revenue growth of 33% over the last two years was superb and indicates its market share increased during this cycle
2. Share repurchases over the last five years enabled its annual earnings per share growth of 17.6% to outpace its revenue gains
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

At $797.56 per share, Eli Lilly trades at 31.5x forward P/E. Is now the time to initiate a position? 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 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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