1 S&P 500 Stock with Exciting Potential and 2 Facing Headwinds

While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.

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 leading the market forward and two that could be in trouble.

Two Stocks to Sell:

A. O. Smith (AOS)

Market Cap: $9.48 billion

Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE:AOS) manufactures water heating and treatment products for various industries.

Why Is AOS Not Exciting?

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. Anticipated sales growth of 2.9% for the next year implies demand will be shaky
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.3% annually

At $68.13 per share, A. O. Smith trades at 17x forward P/E. Dive into our free research report to see why there are better opportunities than AOS.

Prudential (PRU)

Market Cap: $40.18 billion

Recognized by its iconic Rock of Gibraltar logo symbolizing strength and stability since 1896, Prudential Financial (NYSE:PRU) provides life insurance, annuities, retirement solutions, investment management, and other financial services to individual and institutional customers globally.

Why Do We Pass on PRU?

1. Insurance policy sales contracted this cycle as net premiums earned decreased by 3.1% annually over the last five years
2. Book value per share tumbled by 11.3% annually over the last five years, showing insurance sector trends are working against its favor during this cycle
3. Debt-to-equity ratio of 1.3× is concerningly high, indicating excessive leverage that could limit financial flexibility

Prudential is trading at $114.84 per share, or 1.2x forward P/B. Read our free research report to see why you should think twice about including PRU in your portfolio.

One Stock to Buy:

American Express (AXP)

Market Cap: $262.3 billion

Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE:AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.

Why Is AXP a Top Pick?

1. Offerings and unique value proposition resonate with customers, as seen in its above-market 12.1% annual sales growth over the last five years
2. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 29.9% exceeded its revenue gains over the last five years
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

American Express’s stock price of $380.50 implies a valuation ratio of 22.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today.