Big companies often invest in research and development to promote growth and profitability. Yet this expense can sometimes be a waste. For every Intel or Merck, which invests wisely, there is an AMD or HP, which does not. Of the 50 American companies that spend the most on research and development (R&D), five lose money, and the net margin of another 15 is less than 10%.

The effectiveness of R&D spending can be measured in several ways. One is the number of patents filed each year. However, patents do not always produce revenue in and of themselves. IBM filed the most patents in the United States last year, while Apple filed only a fraction of that. Notwithstanding recent developments, Apple has been the more successful of the two by far over the past decade.

Many of the companies wasting the most on R&D are shrinking. One of the best examples is chip maker Advanced Micro Devices. Despite large, ongoing investments in R&D, its revenue has faltered for years, and it often has lost money during this time. AMD continues to make no progress against its primary rival, Intel.

When a company is losing money, particularly if it has a history of losses and minuscule profit margins, that’s a red flag it is not spending its R&D investment wisely.

Outside attempts to change management are often a sign Wall Street believes a company is making poor R&D investments. After accumulating a large position in Forest Labs, Carl Icahn forced the company to add one of his representatives to the company’s board. HP has gone through a series of management and board changes due to broad investor dissatisfaction. Michael Dell, the largest shareholder of Dell, recently offered to buy the entire company, to remove possible shareholder influence.

Some would argue that a company struggling to grow its business actually should spend more money on R&D. HP could spend a lot more on R&D. At just 2.8%, the company spends a tiny portion of its overall revenue. However, almost none of the money spent on R&D in the past has helped it move beyond its unsuccessful legacy businesses, such as PCs and printers, and into the growing market of tablets and smartphones.

To identify the companies wasting the most money, 24/7 Wall St. reviewed the 50 companies on the S&P 500 that spent the most on R&D in fiscal 2012. To reflect the extent to which companies were investing their money poorly, companies with the biggest R&D budgets also had to have net margins of less than 3%.

These are America’s most wasteful companies.