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.
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 could deliver good returns and two that may struggle.
Two Stocks to Sell:
MGM Resorts (MGM)
Market Cap: $9.43 billion
Operating several properties on the Las Vegas Strip, MGM Resorts (NYSE: MGM) is a global hospitality and entertainment company known for its resorts and casinos.
Why Are We Out on MGM?
- Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.2% for the last two years
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
- 12× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $37.02 per share, MGM Resorts trades at 18.3x forward P/E. To fully understand why you should be careful with MGM, check out our full research report (it’s free).
Everest Group (EG)
Market Cap: $13.55 billion
Rebranded from Everest Re in 2023 to reflect its evolution beyond just reinsurance, Everest Group (NYSE: EG) underwrites property and casualty reinsurance and insurance worldwide, serving insurance companies, corporations, and other clients across six continents.
Why Are We Cautious About EG?
- Estimated sales decline of 4.1% for the next 12 months implies a challenging demand environment
- Day-to-day expenses have swelled relative to revenue over the last two years as its pre-tax profit margin fell by 4 percentage points
- Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 17.7% annually
Everest Group’s stock price of $335.50 implies a valuation ratio of 0.8x forward P/B. If you’re considering EG for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Motorola Solutions (MSI)
Market Cap: $79.89 billion
Born from the company that invented the first portable handheld police radio in 1940, Motorola Solutions (NYSE: MSI) provides mission-critical communications, video security, and command center software solutions for public safety agencies and enterprise customers.
Why Is MSI a Top Pick?
- Market share has increased this cycle as its 9.5% annual revenue growth over the last five years was exceptional
- Strong free cash flow margin of 19.4% enables it to reinvest or return capital consistently, and its improved cash conversion implies it’s becoming a less capital-intensive business
- Industry-leading 31.3% return on capital demonstrates management’s skill in finding high-return investments
Motorola Solutions is trading at $478.85 per share, or 28.1x 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
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it's flagging for this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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.
