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 are two S&P 500 stocks leading the market forward and one that may struggle.
One Stock to Sell:
Aflac (AFL)
Market Cap: $62.62 billion
Known for its iconic duck mascot that has quacked "Aflac!" in commercials since 2000, Aflac (NYSE: AFL) provides supplemental health and life insurance policies that pay cash benefits directly to policyholders for expenses not covered by their primary insurance.
Why Do We Pass on AFL?
- Net premiums earned contracted by 6.2% annually over the last five years, showing unfavorable market dynamics this cycle
- Projected book value per share decline of 4.8% for the next 12 months points to tough credit quality challenges ahead
- Elevated debt-to-equity ratio of 1.9× suggests the firm is overleveraged and may struggle to secure additional financing
Aflac is trading at $123.09 per share, or 2x forward P/B. Read our free research report to see why you should think twice about including AFL in your portfolio.
Two Stocks to Watch:
Booking (BKNG)
Market Cap: $143.1 billion
Formerly known as The Priceline Group, Booking Holdings (NASDAQ: BKNG) is the world’s largest online travel agency.
Why Could BKNG Be a Winner?
- Platform and reputation resonate with consumers, as seen in its above-market 15.1% annual sales growth over the last three years
- Performance over the past three years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- BKNG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Booking’s stock price of $184.81 implies a valuation ratio of 13.3x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Caterpillar (CAT)
Market Cap: $404 billion
With its iconic yellow machinery working on construction sites, Caterpillar (NYSE: CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.
Why Should CAT Be on Your Watchlist?
- Highly efficient business model is illustrated by its impressive 16.9% operating margin, and its operating leverage amplified its profits over the last five years
- Free cash flow margin increased by 4.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $870.10 per share, Caterpillar trades at 35.8x 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
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.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
