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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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here is one S&P 500 stock that is positioned to outperform and two that may struggle.
Two Stocks to Sell:
Hilton (HLT)
Market Cap: $60.8 billion
Founded in 1919, Hilton Worldwide (NYSE:HLT) is a global hospitality company with a portfolio of hotel brands.
Why Are We Hesitant About HLT?
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Annual sales growth of 4.3% over the last five years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
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Revenue per room has underperformed over the past two years, suggesting it may need to develop new facilities
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Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its two-year trend
At $257.27 per share, Hilton trades at 31.4x forward P/E. To fully understand why you should be careful with HLT, check out our full research report (it’s free).
Agilent (A)
Market Cap: $32.44 billion
Originally spun off from Hewlett-Packard in 1999 as its measurement and analytical division, Agilent Technologies (NYSE:A) provides analytical instruments, software, services, and consumables for laboratory workflows in life sciences, diagnostics, and applied chemical markets.
Why Is A Not Exciting?
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Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
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Projected sales growth of 4.1% for the next 12 months suggests sluggish demand
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Overall productivity fell over the last two years as its plummeting sales were accompanied by a decline in its adjusted operating margin
Agilent’s stock price of $113.50 implies a valuation ratio of 19.9x forward P/E. Check out our free in-depth research report to learn more about why A doesn’t pass our bar.
One Stock to Buy:
Elevance Health (ELV)
Market Cap: $91.12 billion
Formerly known as Anthem until its 2022 rebranding, Elevance Health (NYSE:ELV) is one of America's largest health insurers, serving approximately 47 million medical members through its network-based managed care plans.
Why Is ELV a Good Business?
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Unparalleled scale of $183.3 billion in revenue enables it to spread administrative costs across a larger membership base
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Earnings per share grew by 11.5% annually over the last five years, comfortably beating the peer group average
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Stellar returns on capital showcase management’s ability to surface highly profitable business ventures