3 S&P 500 Stocks in the Doghouse

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. Keeping that in mind, here are three S&P 500 stocks to steer clear of and a few alternatives to consider.

Snap-on (SNA)

Market Cap: $16.41 billion

Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.

Why Do We Think Twice About SNA?

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. 6.3 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
3. Eroding returns on capital suggest its historical profit centers are aging

Snap-on is trading at $313.76 per share, or 15.6x forward P/E. Check out our free in-depth research report to learn more about why SNA doesn’t pass our bar.

Walgreens (WBA)

Market Cap: $9.51 billion

Primarily offering prescription medicine, health, and beauty products, Walgreens Boots Alliance (NASDAQ:WBA) is a pharmacy chain formed through the 2014 major merger of American company Walgreens and European company Alliance Boots.

Why Does WBA Worry Us?

1. Annual sales growth of 2.9% over the last six years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
2. Widely-available products (and therefore stiff competition) result in an inferior gross margin of 18% that must be offset through higher volumes
3. 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $10.99 per share, Walgreens trades at 7.2x forward P/E. If you’re considering WBA for your portfolio, see our FREE research report to learn more.

Revvity (RVTY)

Market Cap: $11.15 billion

Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE:RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.

Why Are We Out on RVTY?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 8.8 percentage points
3. Eroding returns on capital suggest its historical profit centers are aging

Revvity’s stock price of $92.83 implies a valuation ratio of 18x forward P/E. Read our free research report to see why you should think twice about including RVTY in your portfolio.

Stocks That Overcame Trump’s 2018 Tariffs

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.