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1 S&P 500 Stock for Long-Term Investors and 2 We Turn Down
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:
Darden (DRI)
Market Cap: $22.23 billion
Founded in 1968 as Red Lobster, Darden (NYSE:DRI) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Why Are We Hesitant About DRI?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 6.5% over the last seven years was below our standards for the restaurant sector
- Estimated sales growth of 3.6% for the next 12 months implies demand will slow from its seven-year trend
- Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 21.8%
Darden’s stock price of $194.07 implies a valuation ratio of 17.2x forward P/E. Dive into our free research report to see why there are better opportunities than DRI.
PNC Financial Services Group (PNC)
Market Cap: $99.57 billion
Tracing its roots back to 1852 when Pittsburgh's industrial boom demanded stronger financial institutions, PNC (NYSE:PNC) is a diversified financial institution that provides retail banking, corporate banking, and asset management services through a coast-to-coast branch network.
Why Does PNC Fall Short?
- Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 9.4% over the last five years was below our standards for the banking sector
- Net interest margin of 2.8% reflects its high servicing and capital costs
- Tangible book value per share is projected to decrease by 4.5% over the next 12 months as capital generation weakens
PNC Financial Services Group is trading at $251.07 per share, or 1.7x forward P/B. If you’re considering PNC for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Coca-Cola (KO)
Market Cap: $349.2 billion
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE:KO) is a storied beverage company best known for its flagship soda.
Why Is KO on Our Radar?
- Unique products and pricing power are reflected in its best-in-class gross margin of 61.4%
- Healthy operating margin of 27% shows it’s a well-run company with efficient processes, and its rise over the last year was fueled by some leverage on its fixed costs
- Free cash flow margin jumped by 27.5 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $81.21 per share, Coca-Cola trades at 24.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.