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The S&P 500 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.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are two S&P 500 stocks leading the market forward and one that may struggle.

One Stock to Sell:

Dollar General (DG)

Market Cap: $20.37 billion

Appealing to the budget-conscious consumer, Dollar General (NYSE:DG) is a discount retailer that sells a wide range of household essentials, groceries, apparel/beauty products, and seasonal merchandise.

Why Are We Wary of DG?

1. Poor same-store sales performance over the past two years indicates it’s having trouble bringing new shoppers into its brick-and-mortar locations

2. Gross margin of 29.9% is an output of its commoditized inventory

3. 6× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $92.50 per share, Dollar General trades at 15.8x forward price-to-earnings. To fully understand why you should be careful with DG, check out our full research report (it’s free).

Two Stocks to Watch:

Colgate-Palmolive (CL)

Market Cap: $74.39 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 on Our Radar?

1. Dominant market position is represented by its $20.1 billion in revenue, which gives it negotiating power with suppliers and retailers

2. Strong free cash flow margin of 16.6% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety

3. Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

Colgate-Palmolive is trading at $92 per share, or 24.5x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

First Solar (FSLR)

Market Cap: $13.78 billion

Headquartered in Arizona, First Solar (NASDAQ:FSLR) specializes in manufacturing solar panels and providing photovoltaic solar energy solutions.

Why Are We Backing FSLR?

1. Impressive 26.7% annual revenue growth over the last two years indicates it’s winning market share this cycle

2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 453% over the last two years outstripped its revenue performance

3. Negative free cash flow margin has improved over the last five years, showing the company is one step closer to financial self-sufficiency