2 S&P 500 Stocks to Consider Right Now and 1 We Turn Down

Barchart·05/06/2026 00:38:20

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.

Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here are two S&P 500 stocks positioned to outperform and one best left off your watchlist.

One Stock to Sell:

FedEx (FDX)

Market Cap: $86.55 billion

Sporting one of the largest air cargo fleets in the world, FedEx (NYSE:FDX) is a global provider of parcel and cargo delivery services.

Why Is FDX Risky?

1. 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 2.5% for the last two years
2. Poor free cash flow margin of 2.4% for the last five years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

FedEx is trading at $363.94 per share, or 17x forward P/E. To fully understand why you should be careful with FDX, check out our full research report (it’s free).

Two Stocks to Watch:

Trane Technologies (TT)

Market Cap: $105.5 billion

With low-pressure heating systems as its first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.

Why Will TT Outperform?

1. Annual revenue growth of 11% over the past five years was outstanding, reflecting market share gains this cycle
2. Share buybacks catapulted its annual earnings per share growth to 17.6%, which outperformed its revenue gains over the last two years
3. Free cash flow margin jumped by 8.4 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends

At $480.58 per share, Trane Technologies trades at 31.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

Cigna (CI)

Market Cap: $72.92 billion

With roots dating back to 1792 and serving millions of customers across the globe, The Cigna Group (NYSE:CI) provides healthcare services through its Evernorth Health Services and Cigna Healthcare segments, offering pharmacy benefits, specialty care, and medical plans.

Why Does CI Stand Out?

1. Solid 16.1% annual revenue growth over the last two years indicates its offering’s solve complex business issues
2. Dominant market position is represented by its $277.7 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
3. Earnings per share have comfortably outperformed the peer group average over the last five years, increasing by 10.9% annually

Cigna’s stock price of $275.70 implies a valuation ratio of 9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

This article contains syndicated content. We have not reviewed, approved, or endorsed the content, and may receive compensation for placement of the content on this site. For more information please view the Barchart Disclosure Policy here.