1 S&P 500 Stock for Long-Term Investors and 2 We Ignore

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.

Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here is one S&P 500 stock that is leading the market forward and two that could be in trouble.

Market Cap: $63.6 billion

Born from the vision of PeopleSoft founders after Oracle’s hostile takeover of their previous company, Workday (NASDAQ:WDAY) provides cloud-based software for financial management, human resources, planning, and analytics to help organizations manage their business operations.

Why Does WDAY Worry Us?

1. Offerings struggled to generate meaningful interest as its average billings growth of 13.7% over the last year did not impress

2. Estimated sales growth of 12.8% for the next 12 months implies demand will slow from its two-year trend

3. Operating profits and efficiency rose over the last year as it benefited from some fixed cost leverage

At $234.96 per share, Workday trades at 6.4x forward price-to-sales. Read our free research report to see why you should think twice about including WDAY in your portfolio, it’s free for active Edge members.

Market Cap: $24.02 billion

Founded in 1992 as a pioneer in networked storage technology, NetApp (NASDAQ:NTAP) provides data storage and management solutions that help organizations store, protect, and optimize their data across on-premises data centers and public clouds.

Why Are We Hesitant About NTAP?

1. 3.1% annual revenue growth over the last two years was slower than its business services peers

2. Anticipated sales growth of 4.1% for the next year implies demand will be shaky

NetApp’s stock price of $113.89 implies a valuation ratio of 14.9x forward P/E. Check out our free in-depth research report to learn more about why NTAP doesn’t pass our bar.

Market Cap: $246.9 billion

Founded in 1869 as a small commercial paper business in New York City, Goldman Sachs (NYSE:GS) is a global financial institution that provides investment banking, securities, asset management, and consumer banking services to corporations, governments, and individuals.

Why Do We Like GS?

1. Annual revenue growth of 10.9% over the last two years was above the sector average and underscores its products and services value to customers

2. Share buybacks catapulted its annual earnings per share growth to 39.5%, which outperformed its revenue gains over the last two years

3. Adequate return on equity shows management makes decent investment decisions