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.
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 that don’t make the cut and some better choices instead.
Salesforce (CRM)
Market Cap: $207.6 billion
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Are We Wary of CRM?
- ARR growth averaged a weak 9.1% over the last year, suggesting that competition is pulling some attention away from its software
- Estimated sales growth of 11.8% for the next 12 months is soft and implies weaker demand
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
At $223.03 per share, Salesforce trades at 4.6x forward price-to-sales. Check out our free in-depth research report to learn more about why CRM doesn’t pass our bar.
Kimberly-Clark (KMB)
Market Cap: $33.2 billion
Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE: KMB) is now a household products powerhouse known for personal care and tissue products.
Why Is KMB Not Exciting?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 1.9%
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 6.3 percentage points
Kimberly-Clark is trading at $100.07 per share, or 13.1x forward P/E. To fully understand why you should be careful with KMB, check out our full research report (it’s free).
Carrier Global (CARR)
Market Cap: $48.63 billion
Founded by the inventor of air conditioning, Carrier Global (NYSE: CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.
Why Should You Dump CARR?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Sales are projected to remain flat over the next 12 months as demand decelerates from its two-year trend
- Waning returns on capital imply its previous profit engines are losing steam
Carrier Global’s stock price of $57.86 implies a valuation ratio of 20.4x forward P/E. Dive into our free research report to see why there are better opportunities than CARR.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
