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While the S&P 500 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. That said, here is one S&P 500 stock that could deliver good returns and two that may struggle.

Two Stocks to Sell:

Zimmer Biomet (ZBH)

Market Cap: $22.35 billion

With a history dating back to 1927 and a presence in over 100 countries worldwide, Zimmer Biomet (NYSE:ZBH) designs and manufactures orthopedic products including knee and hip replacements, surgical tools, and robotic technologies for joint reconstruction and spine surgeries.

Why Are We Wary of ZBH?

1. Sales were flat over the last five years, indicating it’s failed to expand this cycle

2. Flat earnings per share over the last five years underperformed the sector average

3. ROIC of 3% reflects management’s challenges in identifying attractive investment opportunities

Zimmer Biomet’s stock price of $114 implies a valuation ratio of 13.1x forward price-to-earnings. To fully understand why you should be careful with ZBH, check out our full research report (it’s free).

Quest (DGX)

Market Cap: $18.57 billion

Processing approximately one-third of the adult U.S. population's lab tests annually, Quest Diagnostics (NYSE:DGX) provides laboratory testing and diagnostic information services to patients, physicians, hospitals, and other healthcare providers across the United States.

Why Does DGX Give Us Pause?

1. Underwhelming requisition volumes over the past two years indicate demand is soft and that the company may need to revise its strategy

2. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 7.8 percentage points

3. Eroding returns on capital suggest its historical profit centers are aging

At $166.10 per share, Quest trades at 17.2x forward price-to-earnings. Read our free research report to see why you should think twice about including DGX in your portfolio, it’s free.

One Stock to Watch:

Republic Services (RSG)

Market Cap: $74.49 billion

Processing several million tons of recyclables annually, Republic (NYSE:RSG) provides waste management services for residences, companies, and municipalities.

Why Do We Watch RSG?

1. Solid 9.3% annual revenue growth over the last five years indicates its offerings solve complex business issues

2. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 18.4%, and its rise over the last five years was fueled by some leverage on its fixed costs

3. Strong free cash flow margin of 13.2% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business