3 S&P 500 Stocks with Questionable Fundamentals

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.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. That said, here are three S&P 500 stocks to avoid and some better alternatives instead.

Textron (TXT)

Market Cap: $17.14 billion

Listed on the NYSE in 1947, Textron (NYSE:TXT) provides products and services in the aerospace, defense, industrial, and finance sectors.

Why Does TXT Fall Short?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.5% annually
3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.4 percentage points

Textron’s stock price of $97.68 implies a valuation ratio of 14.9x forward P/E. If you’re considering TXT for your portfolio, see our FREE research report to learn more.

Globe Life (GL)

Market Cap: $11.46 billion

With roots dating back to 1900 and a rebranding from Torchmark Corporation in 2019, Globe Life (NYSE:GL) is an insurance holding company that offers life insurance, supplemental health insurance, and annuity products through various distribution channels.

Why Are We Wary of GL?

1. 4.5% annual revenue growth over the last two years was slower than its insurance peers
2. 4.8% annualized net premiums earned growth over the last two years lagged behind its insurance peers
3. Products and services are facing significant credit quality challenges during this cycle as book value per share has declined by 3.5% annually over the last five years

Globe Life is trading at $143.96 per share, or 1.7x forward P/B. Check out our free in-depth research report to learn more about why GL doesn’t pass our bar.

PNC Financial Services Group (PNC)

Market Cap: $91.93 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 Is PNC Not Exciting?

1. Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 7.7% over the last five years was below our standards for the banking sector
2. Inferior net interest margin of 2.7% means it must compensate for lower profitability through increased loan originations
3. Forecasted tangible book value per share decline of 7.8% for the upcoming 12 months implies profitability will deteriorate significantly

At $235.45 per share, PNC Financial Services Group trades at 1.6x forward P/B. Dive into our free research report to see why there are better opportunities than PNC.

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.