While the S&P 500 (^GSPC) includes industry leaders, not every stock in the index is a winner. Some companies are past their prime, weighed down by poor execution, weak financials, or structural headwinds.
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.
Henry Schein (HSIC)
Market Cap: $9.76 billion
With a vast inventory of over 300,000 products stocked in distribution centers spanning more than 5.3 million square feet worldwide, Henry Schein (NASDAQ:HSIC) is a global distributor of healthcare products and services primarily to dental practices, medical offices, and other healthcare facilities.
Why Are We Hesitant About HSIC?
- 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
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.7%
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Henry Schein is trading at $85.71 per share, or 15.5x forward P/E. Dive into our free research report to see why there are better opportunities than HSIC.
Invesco (IVZ)
Market Cap: $12.99 billion
With roots dating back to 1935 when it pioneered the first mutual fund with an objective of capital growth, Invesco (NYSE:IVZ) is a global asset management firm that offers investment solutions across equities, fixed income, alternatives, and multi-asset strategies.
Why Are We Out on IVZ?
- Sales were flat over the last five years, indicating it’s failed to expand this cycle
- Earnings per share fell by 1.5% annually over the last five years while its revenue was flat, showing each sale was less profitable
- High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Invesco’s stock price of $29.49 implies a valuation ratio of 10x forward P/E. Check out our free in-depth research report to learn more about why IVZ doesn’t pass our bar.
Fifth Third Bancorp (FITB)
Market Cap: $52.4 billion
Named after the merger of Third National Bank and Fifth National Bank in 1908, Fifth Third Bancorp (NASDAQ:FITB) is a financial services company that provides banking, lending, wealth management, and investment services to individuals and businesses across the Midwest and Southeast.
Why Are We Wary of FITB?
- Scale is a double-edged sword because it limits the firm’s growth potential compared to its smaller competitors, as reflected in its below-average annual net interest income increases of 8.7% for the last five years
- Incremental sales over the last five years were less profitable as its 1.1% annual earnings per share growth lagged its revenue gains
- Flat tangible book value per share over the last five years suggests it must find different ways to enhance shareholder value during this cycle
At $57.99 per share, Fifth Third Bancorp trades at 1.6x forward P/B. Read our free research report to see why you should think twice about including FITB in your portfolio.
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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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.