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.
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 to steer clear of and a few alternatives to consider.
Norwegian Cruise Line (NCLH)
Market Cap: $8.95 billion
With amenities like a full go-kart race track built into its ships, Norwegian Cruise Line (NYSE: NCLH) is a premier global cruise company.
Why Are We Out on NCLH?
- Number of passenger cruise days has disappointed over the past two years, indicating weak demand for its offerings
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Limited cash reserves may force the company to seek unfavorable financing terms that could dilute shareholders
Norwegian Cruise Line is trading at $19.50 per share, or 12.6x forward P/E. Read our free research report to see why you should think twice about including NCLH in your portfolio.
Assurant (AIZ)
Market Cap: $13.65 billion
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE: AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Why Are We Wary of AIZ?
- Net premiums earned only expanded by 5.2% annually over the last five years, trailing its insurance peers as its scale limited incremental business
- Earnings per share lagged its peers over the last two years as they only grew by 13% annually
- Large asset base makes it harder to grow book value per share quickly, and its annual book value per share growth of 4.2% over the last five years was below our standards for the insurance sector
At $271.93 per share, Assurant trades at 2.2x forward P/B. If you’re considering AIZ for your portfolio, see our FREE research report to learn more.
Sysco (SYY)
Market Cap: $38.63 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 Do We Avoid SYY?
- Unit sales averaged 1.1% growth over the past two years and imply healthy demand for its products
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 2.4% for the last two years
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Sysco’s stock price of $81.88 implies a valuation ratio of 17.1x forward P/E. Dive into our free research report to see why there are better opportunities than SYY.
Stocks We Like More
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
