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 are two S&P 500 stocks leading the market forward and one best left off your watchlist.
One Stock to Sell:
Emerson Electric (EMR)
Market Cap: $74.29 billion
Founded in 1890, Emerson Electric (NYSE: EMR) is a multinational technology and engineering company providing solutions in the industrial, commercial, and residential markets.
Why Do We Think Twice About EMR?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.6% over the last five years was below our standards for the industrials sector
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.5%
- 3.2 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
At $133.77 per share, Emerson Electric trades at 21x forward P/E. Read our free research report to see why you should think twice about including EMR in your portfolio.
Two Stocks to Watch:
Datadog (DDOG)
Market Cap: $45 billion
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Is DDOG a Top Pick?
- ARR growth averaged 27.6% over the last year, showing customers are willing to take multi-year bets on its software
- Superior software functionality and low servicing costs lead to a premier gross margin of 80%
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
Datadog is trading at $127.00 per share, or 11.3x forward price-to-sales. Is now a good time to buy? Find out in our full research report, it’s free.
Analog Devices (ADI)
Market Cap: $150 billion
Founded by two MIT graduates, Ray Stata and Matthew Lorber in 1965, Analog Devices (NASDAQ: ADI) is one of the largest providers of high performance analog integrated circuits used mainly in industrial end markets, along with communications, autos, and consumer devices.
Why Are We Positive On ADI?
- Market share has increased this cycle as its 14.9% annual revenue growth over the last five years was exceptional
- Operating margin improvement of 10.4 percentage points over the last five years demonstrates its ability to scale efficiently
- ADI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
Analog Devices’s stock price of $310.57 implies a valuation ratio of 26.7x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
