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. That said, here are two S&P 500 stocks that could deliver good returns and one that could be in trouble.
One Stock to Sell:
AT&T (T)
Market Cap: $174.1 billion
Founded by Alexander Graham Bell, AT&T (NYSE: T) is a multinational telecomm conglomerate providing a range of communications and internet services.
Why Is T Risky?
- Products and services have few die-hard fans as sales have declined by 5.6% annually over the last five years
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.2 percentage points over the next year
- Improving returns on capital suggest management is identifying more profitable investments
AT&T’s stock price of $24.54 implies a valuation ratio of 11.5x forward P/E. Read our free research report to see why you should think twice about including T in your portfolio.
Two Stocks to Watch:
Altria (MO)
Market Cap: $96.2 billion
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Are We Positive On MO?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 70.9%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 55%
- MO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
Altria is trading at $57.38 per share, or 10.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Lululemon (LULU)
Market Cap: $24.73 billion
Originally serving yogis and hockey players, Lululemon (NASDAQ: LULU) is a designer, distributor, and retailer of athletic apparel for men and women.
Why Are We Bullish on LULU?
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 3.8% growth over the past two years
- Differentiated product assortment results in a best-in-class gross margin of 58.6%
- Strong free cash flow margin of 12.8% enables it to reinvest or return capital consistently
At $210.70 per share, Lululemon trades at 17.1x 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
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. 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.
