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.
Even among blue-chip stocks, not all investments are created equal - which is why we built StockStory to help you navigate the market. That said, here are three S&P 500 stocks to avoid and some better alternatives instead.
3M (MMM)
Market Cap: $82.36 billion
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Should You Sell MMM?
- 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 3.3%
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
3M is trading at $166.00 per share, or 18.5x forward P/E. Dive into our free research report to see why there are better opportunities than MMM.
Revvity (RVTY)
Market Cap: $11.33 billion
Formerly known as PerkinElmer until its rebranding in 2023, Revvity (NYSE: RVTY) provides health science technologies and services that support the complete workflow from discovery to development and diagnosis to cure.
Why Do We Think RVTY Will Underperform?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Inability to adjust its cost structure while its revenue declined over the last five years led to a 6 percentage point drop in the company’s adjusted operating margin
- Sales were less profitable over the last five years as its earnings per share fell by 14.7% annually, worse than its revenue declines
At $105.66 per share, Revvity trades at 18.2x forward P/E. Read our free research report to see why you should think twice about including RVTY in your portfolio.
Franklin Resources (BEN)
Market Cap: $16.53 billion
Operating under the widely recognized Franklin Templeton brand since 1947, Franklin Resources (NYSE: BEN) is a global investment management organization that offers financial services and solutions to individuals, institutions, and wealth advisors worldwide.
Why Should You Dump BEN?
- Muted 5.4% annual revenue growth over the last five years shows its demand lagged behind its financials peers
- Earnings per share fell by 1.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
- Below-average return on equity indicates management struggled to find compelling investment opportunities
Franklin Resources’s stock price of $32.49 implies a valuation ratio of 12x forward P/E. Dive into our free research report to see why there are better opportunities than BEN.
Stocks We Like More
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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
