2 S&P 500 Stocks with Solid Fundamentals and 1 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.

Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here are two S&P 500 stocks positioned to outperform and one best left off your watchlist.

One Stock to Sell:

Texas Instruments (TXN)

Market Cap: $175.9 billion

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ:TXN) is the world’s largest producer of analog semiconductors.

Why Are We Wary of TXN?

1. Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
2. Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.8% annually
3. Free cash flow margin shrank by 19.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Texas Instruments is trading at $192.91 per share, or 31x forward P/E. Dive into our free research report to see why there are better opportunities than TXN.

Two Stocks to Watch:

HCA Healthcare (HCA)

Market Cap: $119.1 billion

With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE:HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.

Why Are We Bullish on HCA?

1. Massive revenue base of $75.6 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
2. Share buybacks catapulted its annual earnings per share growth to 21%, which outperformed its revenue gains over the last five years
3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

HCA Healthcare’s stock price of $529.61 implies a valuation ratio of 17.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Cardinal Health (CAH)

Market Cap: $51.25 billion

Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE:CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.

Why Could CAH Be a Winner?

1. Enormous revenue base of $244.7 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
2. Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 10.6% is above its two-year trend
3. Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 10.2% annually

At $220.00 per share, Cardinal Health trades at 19.9x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.