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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two best left off your watchlist.
Two Stocks to Sell:
Mondelez (MDLZ)
Market Cap: $78.84 billion
Founded as Nabisco in 1903, Mondelez (NASDAQ: MDLZ) is a packaged snacks powerhouse best known for its Oreo, Cadbury, Toblerone, Ritz, and Trident brands.
Why Does MDLZ Fall Short?
- Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Estimated sales growth of 2.4% for the next 12 months implies demand will slow from its three-year trend
- Earnings per share fell by 2% annually over the last three years while its revenue grew, showing its incremental sales were much less profitable
Mondelez is trading at $61.17 per share, or 18.4x forward P/E. Check out our free in-depth research report to learn more about why MDLZ doesn’t pass our bar.
United Airlines (UAL)
Market Cap: $38.56 billion
Founded in 1926, United Airlines Holdings (NASDAQ: UAL) operates a global airline network, providing passenger and cargo air transportation services across domestic and international routes.
Why Do We Think UAL Will Underperform?
- Number of revenue passenger miles has disappointed over the past two years, indicating weak demand for its offerings
- Subpar operating margin of 8.2% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Free cash flow margin is expected to remain in place over the coming year
United Airlines’s stock price of $118.33 implies a valuation ratio of 9.4x forward P/E. To fully understand why you should be careful with UAL, check out our full research report (it’s free).
One Stock to Watch:
Xylem (XYL)
Market Cap: $29.78 billion
Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Why Does XYL Stand Out?
- Annual revenue growth of 12.7% over the last five years was superb and indicates its market share increased during this cycle
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 16.7% annually, topping its revenue gains
- Free cash flow margin expanded by 5.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $125.05 per share, Xylem trades at 21.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
