1 S&P 500 Stock with Exciting Potential and 2 We Brush Off

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. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two that could be in trouble.

Two Stocks to Sell:

Darden (DRI)

Market Cap: $24.51 billion

Founded in 1968 as Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.

Why Does DRI Give Us Pause?

1. Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 6% over the last six years was below our standards for the restaurant sector
2. Weak same-store sales trends over the past two years suggest there may be few opportunities in its core markets to open new restaurants
3. Gross margin of 21.5% is below its competitors, leaving less money for marketing and promotions

Darden is trading at $210.19 per share, or 19.5x forward P/E. To fully understand why you should be careful with DRI, check out our full research report (it’s free).

Charles River Laboratories (CRL)

Market Cap: $7.99 billion

Named after the Massachusetts river where it was founded in 1947, Charles River Laboratories (NYSE:CRL) provides non-clinical drug development services, research models, and manufacturing support to pharmaceutical and biotechnology companies.

Why Does CRL Worry Us?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Projected sales for the next 12 months are flat and suggest demand will be subdued
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Charles River Laboratories’s stock price of $162.31 implies a valuation ratio of 16.2x forward P/E. Dive into our free research report to see why there are better opportunities than CRL.

One Stock to Watch:

Yum! Brands (YUM)

Market Cap: $39.87 billion

Spun off as an independent company from PepsiCo, Yum! Brands (NYSE:YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.

Why Does YUM Stand Out?

1. Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
2. Excellent operating margin of 31.9% highlights the efficiency of its business model
3. YUM is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $145.25 per share, Yum! Brands trades at 22.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check 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-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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