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?
- 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
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 4.5% annually
- 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?
- 4.5% annual revenue growth over the last two years was slower than its insurance peers
- 4.8% annualized net premiums earned growth over the last two years lagged behind its insurance peers
- 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?
- 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
- Inferior net interest margin of 2.7% means it must compensate for lower profitability through increased loan originations
- 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.
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