3 S&P 500 Stocks We Think Twice About

Barchart·05/20/2026 02:30:26

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?

1. Demand for its offerings was relatively low as its number of passenger cruise days has underwhelmed
2. 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
3. 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?

1. Products are seeing elevated demand as its unit sales averaged 1.1% growth over the past two years
2. Free cash flow margin is projected to show no improvement next year
3. 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?

1. 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.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

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.

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