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 that don’t make the cut and some better choices instead.
Domino's (DPZ)
Market Cap: $14.55 billion
Founded by two brothers in Michigan, Domino’s (NYSE: DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Why Does DPZ Worry Us?
- Lackluster 5.3% annual revenue growth over the last six years indicates the company is losing ground to competitors
- Projected sales growth of 5.9% for the next 12 months suggests sluggish demand
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 8.9% annually
Domino's is trading at $429.73 per share, or 23.5x forward P/E. Dive into our free research report to see why there are better opportunities than DPZ.
Allegion (ALLE)
Market Cap: $15.39 billion
Allegion plc (NYSE: ALLE) is a provider of security products and solutions that keep people and assets safe and secure in various environments.
Why Is ALLE Not Exciting?
- 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
- 2.7 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
- Eroding returns on capital suggest its historical profit centers are aging
Allegion’s stock price of $179.33 implies a valuation ratio of 22.2x forward P/E. Read our free research report to see why you should think twice about including ALLE in your portfolio.
Dell (DELL)
Market Cap: $88.71 billion
Founded by Michael Dell in his University of Texas dorm room in 1984 with just $1,000, Dell Technologies (NYSE: DELL) provides hardware, software, and services that help organizations build their IT infrastructure, manage cloud environments, and enable digital transformation.
Why Are We Cautious About DELL?
- Sizable revenue base leads to growth challenges as its 2.9% annual revenue increases over the last five years fell short of other business services companies
- Underwhelming ARR growth of 3.6% suggests the company faced challenges in acquiring and retaining long-term customers
- Free cash flow margin shrank by 6.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
At $131.77 per share, Dell trades at 12.7x forward P/E. To fully understand why you should be careful with DELL, check out our full research report (it’s free).
Stocks We Like More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at 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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