1 S&P 500 Stock with Competitive Advantages and 2 We Turn Down

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.

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 best left off your watchlist.

Two Stocks to Sell:

Veralto (VLTO)

Market Cap: $25.6 billion

Spun off from Danaher in 2023, Veralto (NYSE:VLTO) provides water analytics and treatment solutions.

Why Do We Steer Clear of VLTO?

1. Muted 3.6% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
3. Issuance of new shares over the last three years caused its earnings per share to fall by 1.1% annually while its revenue grew

Veralto is trading at $103.27 per share, or 27.7x forward P/E. Dive into our free research report to see why there are better opportunities than VLTO.

Trimble (TRMB)

Market Cap: $20.09 billion

Playing a role in the construction of the Paris Grand, Trimble (NASDAQ:TRMB) offers geospatial devices and technology to the agriculture, construction, transportation, and logistics industries.

Why Is TRMB Risky?

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 decline of 2.5% for the next 12 months implies an even more challenging demand environment
3. Free cash flow margin dropped by 9.6 percentage points over the last five years, implying the company became more capital intensive as competition picked up

At $85.40 per share, Trimble trades at 28.1x forward P/E. To fully understand why you should be careful with TRMB, check out our full research report (it’s free).

One Stock to Watch:

Amgen (AMGN)

Market Cap: $165.9 billion

Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ:AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases.

Why Are We Positive On AMGN?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 14.1% annual sales growth over the last two years
2. Economies of scale give it more fixed cost leverage than its smaller competitors
3. Robust free cash flow margin of 31% gives it many options for capital deployment

Amgen’s stock price of $309.13 implies a valuation ratio of 14.7x 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 2024 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 9 Market-Beating Stocks. 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-micro-cap company Tecnoglass (+1,754% 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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