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The Top 25 Stocks in the S&P 500

The S&P 500 consists of 500 companies that issue a total of 505 stocks, as some companies, such as Berkshire Hathaway, have issued multiple classes of shares. The top 10 largest holdings are listed on the official S&P Global website. An S&P 500 company must meet specific requirements to be included as a constituent within the index.

However, S&P does not currently provide the total list of holdings, at least not for free. Subscribers to S&P’s research unit, Capital IQ, can get access to the entire list. S&P 500 companies represent the top companies within their industries and a gauge of U.S. economic activity.

Key Takeaways

  • The S&P 500 includes some of the top companies that are leaders within their industries and represent a gauge of the U.S. economy.
  • Companies must meet certain requirement criteria, which are determined by the publishers of the index, before being added to the S&P.
  • The S&P 500 index is market capitalization-weighted, where it gives a higher percentage allocation to companies with the largest market cap.
  • To join the S&P 500, a stock must meet certain criteria, including a total market cap of $13.1 billion and a public float of 10% of shares outstanding.
  • Companies may be removed from the S&P 500 if they deviate substantially from these standards.

S&P 500 Inclusion Criteria

The S&P 500 was created in 1957 and is one of the most widely quoted stock market indexes. S&P 500 stocks represent the largest publicly-traded companies in the U.S. The S&P 500 focuses on the U.S. market’s large-cap sector.

An S&P 500 company must meet a broad set of criteria to be added to the index, including the following:

  • A total market capitalization of at least $13.1 billion
  • Must be a U.S. company
  • Must have a public float of at least 10% of its equity shares outstanding
  • A positive sum of the most recent four consecutive quarters of trailing earnings
  • Positive earnings for its most recent quarter
  • Must meet certain liquidity requirements

Companies may be removed from the S&P 500 if they deviate substantially from these standards.

$40.1 trillion

The total combined market cap of the 500 companies in the S&P 500 as of Jan. 31, 2022.

S&P 500 Calculation

The S&P 500 is a free-float market capitalization-weighted index. Market capitalization (or market cap) represents the total dollar market value of a company’s outstanding equity shares. Market cap is calculated by multiplying the total number of outstanding shares of stock by the company’s current stock price. For example, a company with 20 million shares outstanding in which its stock is selling for $100 per share would have a market cap of $2 billion. 

As a result, the more valuable an individual company’s stock becomes, the more it contributes to the S&P 500’s overall return. It is not uncommon for three-quarters of the index’s return to be linked to only 50 to 75 stocks.

Therefore, the addition or subtraction of smaller companies from the index will not have a noticeable impact on the overall return of the index. However, the removal or addition of even just one of the largest stocks can have a major impact.

S&P 500 Sector Breakdown

Below are the top sectors and their weightings within the S&P 500 index as of Jan. 31, 2022.

Being aware of the S&P’s sector weighting is important because sectors with a smaller weighting may not have a material impact on the value of the overall index—even if they’re outperforming or underperforming the market.

For example, if oil prices are rising, leading to increased profits for the energy sector, those stocks represent only 3.4% on the S&P 500. As a result, oil stocks may not lead to a higher S&P if, for example, the more heavily weighted information technology sector is underperforming.

S&P 500 components are weighted by free-float market capitalization, which means that larger companies can affect the value of the index to a greater degree.

Top 25 Components by Market Cap

Because the exact weightings of the top 25 components are not available from S&P directly, the weightings below are from the SPDR S&P 500 Trust ETF (SPY). SPY is the oldest exchange traded fund (ETF) that tracks the S&P 500, as well as the largest by assets under management (AUM) and the most highly traded.

As a result, the SPY’s portfolio weightings provide a good proxy for investing in the underlying S&P 500 index, although the two may not be exactly the same. As of Feb. 18, 2022, the following are the 25 largest S&P 500 index constituents by weight:

  1. Apple (AAPL): 7.08%
  2. Microsoft (MSFT): 5.87%
  3. Amazon (AMZN): 3.61%
  4. Alphabet Class A (GOOGL): 2.13%
  5. Alphabet Class C (GOOG): 1.98%
  6. Tesla (TSLA): 1.89%
  7. NVIDIA Corporation (NVDA): 1.60%
  8. Berkshire Hathaway Class B (BRK.B): 1.57%
  9. Meta (FB), formerly Facebook, Class A: 1.32%
  10. JPMorgan Chase (JPM): 1.22%
  11. UnitedHealth Group (UNH): 1.20%
  12. Johnson & Johnson (JNJ): 1.17%
  13. Procter & Gamble (PG): 1.05%
  14. Visa Class A (V): 1.01%
  15. Home Depot (HD): 0.99%
  16. Bank of America (BAC): 0.90%
  17. Exxon Mobil (XOM): 0.90% 
  18. Mastercard Inc. Class A (MA): 0.87%
  19. Walt Disney (DIS): 0.75%
  20. Pfizer (PFE): 0.74%
  21. Chevron Corporation (CVX): 0.70%
  22. AbbVie Inc. (ABBV): 0.69%
  23. Coca-Cola Company (KO): 0.66%
  24. Cisco Systems Inc. (CSCO): 0.66%
  25. Broadcom Inc. (AVGO): 0.65%

S&P 500 Companies Questions & Answers

How Many Companies Are in the S&P 500?

There are 500 companies within the S&P 500 index. However, there are 505 stocks since some companies have multiple classes of equity shares, such as Alphabet and Berkshire Hathaway.

What Are the Top 10 Holdings in the S&P 500?

As of Feb. 18, 2022, the top ten holdings and their weighting in the index are:

  1. Apple (AAPL): 7.08%
  2. Microsoft (MSFT): 5.87%
  3. Amazon (AMZN): 3.61%
  4. Alphabet Class A (GOOGL): 2.13%
  5. Alphabet Class C (GOOG): 1.98%
  6. Tesla (TSLA): 1.89%
  7. NVIDIA Corporation (NVDA): 1.60%
  8. Berkshire Hathaway Class B (BRK.B): 1.57%
  9. Meta (FB), formerly Facebook, Class A: 1.32%
  10. JPMorgan Chase (JPM): 1.22%

How Are Companies Selected for the S&P 500?

A company must meet certain requirements for inclusion in the S&P 500, which include:

  • A market cap of at least $13.1 billion
  • Must be a U.S. company
  • Company’s stock must have a public float of at least 10% of its outstanding equity shares
  • Positive earnings over the most recent four consecutive quarters summed together
  • A profitable earnings report for the company’s most recent quarter
  • Liquidity requirements

How to Buy the S&P 500?

Since the S&P 500 is an index, it can not be purchased directly. However, exchange traded funds (ETFs) that mirror or track the index can be purchased, such as the State Street Global Advisor’s SPDR S&P 500 Trust ETF (SPY).

This article was originally published by Investopedia.com. Read the original article here.

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