3 S&P 500 Stocks We Keep Off Our Radar

While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.

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 three S&P 500 stocks that don’t make the cut and some better choices instead.

Caterpillar (CAT)

Market Cap: $288 billion

With its iconic yellow machinery working on construction sites, Caterpillar (NYSE:CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.

Why Does CAT Fall Short?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 1.4% annually over the last two years
2. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
3. Earnings per share have contracted by 2% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance

At $615.25 per share, Caterpillar trades at 28.9x forward P/E. To fully understand why you should be careful with CAT, check out our full research report (it’s free for active Edge members).

Jacobs Solutions (J)

Market Cap: $16.06 billion

With a workforce of approximately 45,000 professionals tackling complex challenges from water scarcity to cybersecurity, Jacobs Solutions (NYSE:J) provides engineering, consulting, and technical services focused on infrastructure, sustainability, and advanced technology solutions.

Why Is J Risky?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.4% annually over the last five years
2. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
3. ROIC of 8.1% reflects management’s challenges in identifying attractive investment opportunities

Jacobs Solutions is trading at $135.34 per share, or 19.4x forward P/E. Dive into our free research report to see why there are better opportunities than J.

Wells Fargo (WFC)

Market Cap: $284.7 billion

Founded during the California Gold Rush in 1852 to provide banking and express delivery services to miners and merchants, Wells Fargo (NYSE:WFC) is a diversified financial services company that provides banking, lending, investment, and wealth management services to individuals and businesses.

Why Should You Sell WFC?

1. Sizable revenue base leads to growth challenges as its 2.4% annual net interest income increases over the last five years fell short of other banking companies
2. Net interest margin dropped by 45.3 basis points (100 basis points = 1 percentage point) over the last two years, implying the firm’s loan book profitability fell as competitors entered the market
3. Estimated tangible book value per share growth of 4.9% for the next 12 months implies profitability will slow from its two-year trend

Wells Fargo’s stock price of $90.88 implies a valuation ratio of 1.7x forward P/B. If you’re considering WFC for your portfolio, see our FREE research report to learn more.

Stocks We Like More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

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 Exlservice (+354% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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