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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. That said, here are three S&P 500 stocks that don’t make the cut and some better choices instead.
Skyworks Solutions (SWKS)
Market Cap: $9.79 billion
Result of a merger of Alpha Industries and the wireless communications division of Conexant, Skyworks Solutions (NASDAQ: SWKS) is a designer and manufacturer of chips used in smartphones, autos, and industrial applications to amplify, filter, and process wireless signals.
Why Do We Avoid SWKS?
- Sales tumbled by 7.5% annually over the last two years, showing market trends are working against its favor during this cycle
- Projected sales decline of 10.7% over the next 12 months indicates demand will continue deteriorating
- Efficiency has decreased over the last five years as its operating margin fell by 19.3 percentage points
At $65.72 per share, Skyworks Solutions trades at 14.9x forward P/E. Dive into our free research report to see why there are better opportunities than SWKS.
Globe Life (GL)
Market Cap: $10.55 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?
- Sales trends were unexciting over the last two years as its 4.5% annual growth was below the typical insurance company
- 4.6% 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 2% annually over the last five years
Globe Life is trading at $132.53 per share, or 1.9x forward P/B. To fully understand why you should be careful with GL, check out our full research report (it’s free for active Edge members).
U.S. Bancorp (USB)
Market Cap: $76.8 billion
With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp (NYSE:USB) is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.
Why Are We Cautious About USB?
- 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 5.2% for the last five years
- Net interest margin of 2.7% is well below other banks, signaling its loans aren’t very profitable
- Scale is a double-edged sword because it limits the firm’s capital growth potential compared to its smaller competitors, as reflected in its below-average annual tangible book value per share increases of 2.5% for the last five years
U.S. Bancorp’s stock price of $49.41 implies a valuation ratio of 1.3x forward P/B. Check out our free in-depth research report to learn more about why USB doesn’t pass our bar.
Stocks We Like More
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 6 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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