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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here are three S&P 500 stocks that don’t make the cut and some better choices instead.
Jacobs Solutions (J)
Market Cap: $16.81 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 Should You Sell J?
- Annual sales declines of 6.2% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings per share have dipped by 6.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
- ROIC of 8.2% reflects management’s challenges in identifying attractive investment opportunities
Jacobs Solutions’s stock price of $143.40 implies a valuation ratio of 18.1x forward P/E. Read our free research report to see why you should think twice about including J in your portfolio.
Thermo Fisher (TMO)
Market Cap: $216.5 billion
With over 14,000 sales personnel and a portfolio spanning more than 2,500 technology manufacturers, Thermo Fisher Scientific (NYSE:TMO) provides scientific equipment, reagents, consumables, software, and laboratory services to pharmaceutical, biotech, academic, and healthcare customers worldwide.
Why Is TMO Not Exciting?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 5.1 percentage points
- Performance over the past five years shows its incremental sales were much less profitable, as its earnings per share fell by 1.4% annually
Thermo Fisher is trading at $582.91 per share, or 22.4x forward P/E. If you’re considering TMO for your portfolio, see our FREE research report to learn more.
CVS Health (CVS)
Market Cap: $120.2 billion
With over 9,000 retail pharmacy locations serving as neighborhood health destinations across America, CVS Health (NYSE:CVS) operates retail pharmacies, provides pharmacy benefit management services, and offers health insurance through its Aetna subsidiary.
Why Do We Think Twice About CVS?
- Annual sales growth of 6.9% over the last two years lagged behind its healthcare peers as its large revenue base made it difficult to generate incremental demand
- Estimated sales growth of 1.8% for the next 12 months implies demand will slow from its two-year trend
- Performance over the past five years shows its incremental sales were less profitable, as its 1.1% annual earnings per share growth trailed its revenue gains
At $94.05 per share, CVS Health trades at 11.9x forward P/E. Check out our free in-depth research report to learn more about why CVS doesn’t pass our bar.
Stocks We Like More
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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.