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.
Picking the right S&P 500 stocks requires more than just buying big names, and that’s where StockStory comes in. Keeping that in mind, here are three S&P 500 stocks that don’t make the cut and some better choices instead.
General Mills (GIS)
Market Cap: $18.05 billion
Best known for its portfolio of powerhouse breakfast cereal brands, General Mills (NYSE: GIS) is a packaged foods company that has also made a mark in cereals, baking products, and snacks.
Why Do We Think GIS Will Underperform?
- Shrinking unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Operating profits fell over the last year as its sales dropped and it struggled to adjust its fixed costs
General Mills’s stock price of $37.54 implies a valuation ratio of 11x forward P/E. Check out our free in-depth research report to learn more about why GIS doesn’t pass our bar.
Kraft Heinz (KHC)
Market Cap: $28.72 billion
The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.
Why Are We Out on KHC?
- Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Sales are expected to decline once again over the next 12 months as it continues working through a challenging demand environment
- Operating margin declined by 25.1 percentage points over the last year as its sales cratered
At $24.89 per share, Kraft Heinz trades at 11.7x forward P/E. If you’re considering KHC for your portfolio, see our FREE research report to learn more.
Ingersoll Rand (IR)
Market Cap: $28.65 billion
Started with the invention of the steam drill, Ingersoll Rand (NYSE: IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.
Why Does IR Worry Us?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Estimated sales growth of 3.1% for the next 12 months implies demand will slow from its two-year trend
- Underwhelming 6.1% return on capital reflects management’s difficulties in finding profitable growth opportunities
Ingersoll Rand is trading at $80.88 per share, or 23.2x forward P/E. Check out our free in-depth research report to learn more about why IR doesn’t pass our bar.
Stocks We Like More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
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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.
