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 leading the market forward and one best left off your watchlist.
One Stock to Sell:
NVR (NVR)
Market Cap: $16.72 billion
Known for its unique land acquisition strategy, NVR (NYSE: NVR) is a respected homebuilder and mortgage company in the United States.
Why Is NVR Risky?
- Annual sales declines of 2.1% for the past two years show its products and services struggled to connect with the market during this cycle
- Earnings per share decreased by more than its revenue over the last two years, showing each sale was less profitable
- Diminishing returns on capital suggest its earlier profit pools are drying up
NVR’s stock price of $6,441 implies a valuation ratio of 16.2x forward P/E. To fully understand why you should be careful with NVR, check out our full research report (it’s free).
Two Stocks to Watch:
Colgate-Palmolive (CL)
Market Cap: $71.45 billion
Formed after the 1928 combination between toothpaste maker Colgate and soap maker Palmolive-Peet, Colgate-Palmolive (NYSE: CL) is a consumer products company that focuses on personal, household, and pet products.
Why Is CL Interesting?
- Unparalleled brand awareness is evident in its $21.04 billion revenue base, which gives it advantageous terms because retailers must stock its products
- Products command premium prices and lead to a best-in-class gross margin of 60.5%
- Robust free cash flow margin of 17.6% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
At $89.66 per share, Colgate-Palmolive trades at 22.8x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Gartner (IT)
Market Cap: $11.99 billion
With over 2,500 research experts guiding organizations through complex technology landscapes, Gartner (NYSE: IT) provides research, advisory services, and conferences that help executives make better decisions about technology and other business priorities.
Why Are We Positive on IT?
- 8.1% annual revenue growth over the last five years surpassed the sector average as its services resonated with customers
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
- Improving returns on capital reflect management’s ability to monetize investments
Gartner is trading at $190.14 per share, or 12.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
