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. Keeping that in mind, here are three S&P 500 stocks to avoid and some better alternatives instead.

Conagra (CAG)

Market Cap: $9.35 billion

Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today $(CAG)$ boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.

Why Is CAG Risky?

1. Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
2. Forecasted revenue decline of 3.5% for the upcoming 12 months implies demand will fall off a cliff
3. Underwhelming 5.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging

Conagra’s stock price of $19.55 implies a valuation ratio of 8x forward P/E. To fully understand why you should be careful with CAG, check out our full research report (it’s free).

Pool (POOL)

Market Cap: $12.34 billion

Founded in 1993 and headquartered in Louisiana, Pool $(POOL)$ is one of the largest wholesale distributors of swimming pool supplies, equipment, and related leisure products.

Why Do We Steer Clear of POOL?

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 is forecasted to shrink by 2.4 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Pool is trading at $329.48 per share, or 28.9x forward P/E. Dive into our free research report to see why there are better opportunities than POOL.

U.S. Bancorp (USB)

Market Cap: $72.53 billion

With roots dating back to 1863 and a presence across 26 states primarily in the Midwest and West, U.S. Bancorp $(USB)$ is one of America's largest banks providing lending, deposit services, wealth management, payment processing, and merchant services to individuals and businesses.

Why Does USB Give Us Pause?

1. Large revenue base makes it harder to expand quickly, and its annual net interest income growth of 4.9% over the last five years was below our standards for the banking sector
2. Weak unit economics are reflected in its net interest margin of 2.7%, one of the worst among bank companies
3. Large asset base makes it harder to grow tangible book value per share quickly, and its annual tangible book value per share growth of 2% over the last five years was below our standards for the banking sector

At $46.41 per share, U.S. Bancorp trades at 1.3x forward P/B. Check out our free in-depth research report to learn more about why USB doesn’t pass our bar.

Stocks We Like More

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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