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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. Keeping that in mind, here are three S&P 500 stocks to avoid and some better alternatives instead.
Carnival (CCL)
Market Cap: $33.05 billion
Boasting outrageous amenities like a planetarium on board its ships, Carnival (NYSE: CCL) is one of the world's largest leisure travel companies and a prominent player in the cruise industry.
Why Is CCL Risky?
- Demand for its offerings was relatively low as its number of passenger cruise days has underwhelmed
- Poor free cash flow margin of 9.5% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Carnival is trading at $23.94 per share, or 11.5x forward P/E. Check out our free in-depth research report to learn more about why CCL doesn’t pass our bar.
Sysco (SYY)
Market Cap: $35.95 billion
Powering more than 730,000 commercial kitchens across North America and Europe, Sysco (NYSE: SYY) is a global food distributor that supplies restaurants, healthcare facilities, schools, hotels, and other foodservice establishments with food products and related services.
Why Are We Out on SYY?
- Products are seeing elevated demand as its unit sales averaged 1.1% growth over the past two years
- Free cash flow margin is projected to show no improvement next year
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Sysco’s stock price of $75.21 implies a valuation ratio of 15.4x forward P/E. To fully understand why you should be careful with SYY, check out our full research report (it’s free).
Halliburton (HAL)
Market Cap: $35.91 billion
Behind nearly every oil and gas well drilled worldwide, Halliburton (NYSE: HAL) provides drilling, completion, and production services that help oil and gas companies extract hydrocarbons from underground reservoirs.
Why Are We Hesitant About HAL?
- Gross margin of 16.8% reflects its high production costs and unfavorable asset base
At $42.89 per share, Halliburton trades at 17.9x forward P/E. Dive into our free research report to see why there are better opportunities than HAL.
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
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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.
