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.
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.
Intuit (INTU)
Market Cap: $75.57 billion
Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ:INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.
Why Does INTU Worry Us?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 14.2% underwhelmed
- Estimated sales growth of 9.1% for the next 12 months implies demand will slow from its two-year trend
- Operating margin improvement of 1.3 percentage points over the last year demonstrates its ability to scale efficiently
Intuit is trading at $283 per share, or 3.2x forward price-to-sales. Check out our free in-depth research report to learn more about why INTU doesn’t pass our bar.
IDEX (IEX)
Market Cap: $16.94 billion
Founded in 1988, IDEX (NYSE:IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.
Why Is IEX Not Exciting?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 3.5% annually
- Eroding returns on capital suggest its historical profit centers are aging
At $229.89 per share, IDEX trades at 24.9x forward P/E. To fully understand why you should be careful with IEX, check out our full research report (it’s free).
Masco (MAS)
Market Cap: $13.41 billion
Headquartered just outside of Detroit, MI, Masco (NYSE:MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.
Why Is MAS Risky?
- 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 1.7%
- Waning returns on capital imply its previous profit engines are losing steam
Masco’s stock price of $68.28 implies a valuation ratio of 15.4x forward P/E. Dive into our free research report to see why there are better opportunities than MAS.
Stocks We Like More
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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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.