2 S&P 500 Stocks with Competitive Advantages and 1 That Underwhelm
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. That said, here are two S&P 500 stocks leading the market forward and one that may struggle.
One Stock to Sell:
Genuine Parts (GPC)
Market Cap: $18.59 billion
Largely targeting the professional customer, Genuine Parts (NYSE:GPC) sells auto and industrial parts such as batteries, belts, bearings, and machine fluids.
Why Are We Wary of GPC?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 3.1% over the last three years was below our standards for the consumer retail sector
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Subpar operating margin of 4.3% constrains its ability to invest in process improvements or effectively respond to new competitive threats
Genuine Parts’s stock price of $134.86 implies a valuation ratio of 16.9x forward P/E. Read our free research report to see why you should think twice about including GPC in your portfolio.
Two Stocks to Watch:
Hershey (HSY)
Market Cap: $35.36 billion
Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE:HSY) is an iconic company known for its chocolate products.
Why Do We Like HSY?
- Healthy operating margin of 18.2% shows it’s a well-run company with efficient processes
- Robust free cash flow margin of 16.5% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $176.94 per share, Hershey trades at 19x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Mastercard (MA)
Market Cap: $509 billion
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE:MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Why Do We Love MA?
- Impressive 16.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 22.1% exceeded its revenue gains over the last five years
- ROE punches in at 182%, illustrating management’s expertise in identifying profitable investments
Mastercard is trading at $584.60 per share, or 27.7x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.