The S&P 500 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.

Some large-cap stocks are past their peak, and StockStory is here to help you separate the winners from the laggards. Keeping that in mind, here are three S&P 500 stocks to steer clear of and a few alternatives to consider.

Clorox (CLX)

Market Cap: $17.18 billion

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE:CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Why Does CLX Fall Short?

1. Products fail to spark excitement with consumers, as seen in its flat sales over the last three years
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. Free cash flow margin has shown no improvement over the last year

At $139.94 per share, Clorox trades at 19.7x forward price-to-earnings. Read our free research report to see why you should think twice about including CLX in your portfolio, it’s free.

Carrier Global (CARR)

Market Cap: $52.25 billion

Founded by the inventor of air conditioning, Carrier Global (NYSE:CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.

Why Do We Pass on CARR?

1. 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
2. Free cash flow margin dropped by 7.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Waning returns on capital imply its previous profit engines are losing steam

Carrier Global’s stock price of $60.02 implies a valuation ratio of 20.3x forward price-to-earnings. To fully understand why you should be careful with CARR, check out our full research report (it’s free).

BD (BDX)

Market Cap: $58.01 billion

With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE:BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.

Why Do We Think Twice About BDX?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 3.6% for the last five years
2. 5.1 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
3. Underwhelming 4.3% return on capital reflects management’s difficulties in finding profitable growth opportunities

BD is trading at $201.99 per share, or 13.7x forward price-to-earnings. Check out our free in-depth research report to learn more about why BDX doesn’t pass our bar.

Stocks We Like More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

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Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like United Rentals (+322% five-year return). Find your next big winner with StockStory today for free.