In this article we are going to list the Top 25 S&P 500 Stocks By Index Weight. Click to skip ahead and jump to the Top 5 S&P 500 Stocks By Index Weight.
Let’s first try and understand what the S&P 500 is. The Standard and Poor’s 500 consists of the largest companies listed on the stock exchanges in the United States of America and is a free-float weighted measurement stock market index. It is by far one of the most popular equity indices out there, and many investors, both individuals and corporates, try to ensure that their returns beat the S&P 500 index. Although there is significant turnover, many companies have been mainstays such as Johnson&Johnson (PFE), Bank of America (BAC), Alphabet Inc (GOOGL), and Exxon Mobil (XOM). It isn’t a passive index of the 500 largest companies as some people believe. It took Tesla Inc (TSLA) years to be included in the S&P 500 Index. At the time of the inclusion, Tesla Inc was the sixth largest company in the index. This means passive index investors didn’t really benefit from Tesla’s meteoric rise over the years.
Many major investors out there even recommend simply investing passively in the S&P 500 index. Warren Buffett has been one of the biggest proponents of the index and has always recommended it for investment, along with other major investors such as John C. Bogle and Burton Malkiel, but this advice has always been contingent on the investor planning for a long term horizon rather than a short term horizon, as the returned are steady and compounded year on year. If you’re looking for short term benefits, then other avenues may be better such as cryptocurrency, though generally the risks are significantly higher on such investments as well.
The importance of the S&P 500 cannot be understated at all, and in fact, the performance of the index is one of the biggest indicators of the direction that the economy of the biggest superpower in the world is heading towards. The float adjusted market cap weighted index was launched back in March 4, 1957 and as at December 31, 2020, the index was worth more than $37.4 trillion at the end of May 2021. This is more than the GDP of every country in the world, and contains not just the most valuable companies in the United States, but across the world as well. After all, it consists of the most valuable company in the world as well. The value of the index is updated every 15 seconds, which translated to more than 1,500 times every single day. While it is called the S&P 500 index, initially it tracked only 90 companies before increasing to 500 companies in 1957. Currently, it is comprised of at least 505 stocks, since some companies have multiple classes of stocks.
The index is based on a lot of different industries, and I am sure you could easily guess that the most dominant industry is the information technology sector, which contributes around 26.2% of the total index. This is surprisingly followed by healthcare which contributes just around 13%, while consumer discretionary and financials contributing around 12% each. The rest of the contributors include communication services, industrials, consumer staples, materials, energy, utilities and real estate. It is maintained by the S&P Dow Jones indices, which is a joint venture by News Corp, the CME Group and of course, the S&P 500 Global, the latter of which was founded back in 1917, 104 years ago.
While the index consists entirely of companies which are listed on stock exchanges in the United States, only slightly more than 70% of their revenues are derived in the country, with the rest coming from operations abroad. As of 2018, these companies accounted for nearly 80% of the total equity market in the United States. Considering how the major technology companies have grown over the past year and a half, this percentage will only have increased further. Just the top 10 companies in the index make up more than a fifth of the total index.
Without any doubt, these companies are among some of the most popular and well-known companies not just in the United States, but in the world, thanks to their global operations, reach and influence. It would be safe to say they wield more influence than many countries and definitely more money. One important thing to note is that the weight of the company is not based on its market cap, which is why you will see companies with higher market cap being ranked behind companies with lower market cap. This is not a mistake, but the way the index assigns weightage. So without further ado, let’s take a look at the top 25 S&P 500 stocks by index weight, starting with number 25:
25. Cisco Systems Inc. (NASDAQ:CSCO)
Total market cap (in billions of dollars): 228.238
The technology company is involved in software, hardware, telecommunications equipment and many other tech products. The company recording over $49 billion in revenue in 2020, a drop from 2019 amidst the pandemic.
Ken Wolter / Shutterstock.com
24. Intel Corp. (NASDAQ:INTC)
Total market cap (in billions of dollars): 234.971
One of the biggest semiconductor companies in the world, Intel recorded nearly $78 billion in revenue in 2020, an increase from the previous year as demand increased during the pandemic. Due to its dominance, it has been accused of anticompetition practices.
Pixabay/Public Domain
23. Verizon Communications (NYSE:VZ)
Total market cap (in billions of dollars): 236.812
Verizon ranks 23rd on our list of the top 25 S&P 500 stocks by index weight. One of the biggest telecommunication companies in the world, it is also the second biggest wireless carrier in the country.
Northfoto / Shutterstock.com
22. Adobe Inc. (NASDAQ:ADBE)
Total market cap (in billions of dollars): 236.812
Adobe is a major software company and was founded 38 years ago in 1982, with its flagship products including Photoshop, Adobe Illustrator, Adobe Acrobat Reader and its Portable Document Format (PDF).
Copyright: photogearch / 123RF Stock Photo
21. Comcast Corp. Class A (NASDAQ:CMCSA)
Total market cap (in billions of dollars): 263.161
Comcast is the largest TV cable company as well as the largest pay-TV company in the United States, not to mention being the biggest provider of internet services in the country as well.
Copyright: jetcityimage / 123RF Stock Photo
20. Exxon Mobil Corp. (NYSE:XOM)
Total market cap (in billions of dollars): 262.776
One of the biggest oil companies in the world and a direct descendant of Standard Oil, Exxon Mobil’s revenues dropped top $178 billion in 2020 amidst a huge hit to the oil industry during the pandemic.
Barry Blackburn / Shutterstock.com
19. PayPal Holdings (NASDAQ:PYPL)
Total market cap (in billions of dollars): 322.969
PayPal ranks 19th on our list of the top 25 S&P 500 stocks by index weight. Even now, in 2021, there is barely any better option for transferring money online than PayPal, and made nearly $17 billion in 2019.
www.BillionPhotos.com / Shutterstock.com
18. Bank of America (NYSE:BAC)
Total market cap (in billions of dollars): 354.341
One of the biggest banks in the country, Bank of America has more than 4,600 retail financial centers in addition to more than 16,000 ATMs across the country.
Pixabay/Public Domain
17. Mastercard (NYSE:MA)
Total market cap (in billions of dollars): 363.209
Mastercard is a financial services and card company, and is not the only company in this industry to make the list of the top 25 S&P 500 stocks by index weight.
16. Walt Disney Company (NYSE:DIS)
Total market cap (in billions of dollars): 323.813
One of the most famous companies especially among children, Walt Disney Company has continued to acquire more and more companies as it grows significantly, and recently introduced Disney+ as a streaming service.
Copyright: blanscape / 123RF Stock Photo
15. Home Depot (NYSE:HD)
Total market cap (in billions of dollars): 328.888
Home Depot ranks 15th on our list of the top 25 S&P 500 stocks by index weight. During the pandemic, more and more people turned to DIY home improvements, which was great news for Home Depot and has at least 70 distribution centers across the country, while also operating in Canada and Mexico.
ThreeRivers11 / Shutterstock.com
14. Procter & Gamble (NYSE:PG)
Total market cap (in billions of dollars): 330.291
One of the biggest FMCG companies in the world, P&G is responsible for some of the most famous brands in the world including Gillette, Febreeze, Bounty and Tide among others.
Copyright: jetcityimage / 123RF Stock Photo
13. UnitedHealth Group (NYSE:UNH)
Total market cap (in billions of dollars): 376.688
UnitedHealth ranks 13th on our list of the top 25 S&P 500 stocks by index weight. The healthcare company is representative of America’s for profit healthcare system, which is unique among developed countries, which tend to provide free healthcare which is not for profit. In addition to healthcare products, it provides insurance products as well.
Ken Wolter/Shutterstock.com
12. Visa (NYSE:V)
Total market cap (in billions of dollars): 515.063
The financial services company is among the most popular in the world by far, and provided debit cards, credit cards and prepaid cards, and is easily among the top 25 S&P stocks by index weight.
11. NVIDIA (NASDAQ:NVDA)
Total market cap (in billions of dollars): 449.027
The artificial intelligence company has produced graphic processing units which are extremely popular in the gaming as well as professional computing, with a recent rise in popularity among cryptocurrency miners.
Pixabay/Public Domain
10. Johnson & Johnson (NYSE:JNJ)
Total market cap (in billions of dollars): 435.485
J&J ranks 10th on our list of the top 25 S&P 500 stocks by index weight. Johnson & Johnson is one of the biggest pharmaceutical companies in the world, with a huge consumer portfolio as well. The company recently launched a vaccine for Covid-19, and has more than 250 subsidiaries along with a presence in at least 175 countries.
Trong Nguyen / Shutterstock.com
9. Telsa (NASDAQ:TSLA)
Total market cap (in billions of dollars): 595.039
Tesla’s growth over the past year and a half has been nothing short of astonishing, even though the company is still barely profitable. Its owner Elon Musk earned more than $100 billion in 2020 alone.
david-von-diemar-ZBWn5DvO0hg-unsplash
8. JP Morgan Chase (NYSE:JPM)
Total market cap (in billions of dollars): 476.985
JP Morgan ranks 8th on our list of the top 25 S&P 500 stocks by index weight. One of the biggest banks not just in the country but the world, JP Morgan Chase has often faced negative press due to its activities, such as a CEO to worker pay ratio of 381:1, involvement in the Enron scandal and overcharging mortgage of active military duty personnel among many others.
Pixabay/Public Domain
7. Berkshire Hathaway (NYSE:BRK.B)
Total market cap (in billions of dollars): 647.489
The biggest financial services company in the world, led by the legendary Warren Buffett, recorded revenues of $245.5 billion in 2020, which is actually a decrease when compared with 2019. As mentioned earlier, Warren Buffett has mentioned multiple times that investing in the S&P 500 index is a very good decision that investors can make.
Pixabay/Public Domain
6. Alphabet Inc C (NASDAQ:GOOG)
Total market cap (in billions of dollars): 1,664
Both of Alphabet’s shares are listed on our list of top S&P 500 stocks by index weight, and is the only company to achieve this feat in the United States.
Click to continue reading and see the Top 5 S&P 500 Stocks By Index Weight.
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Disclosure: None. Top 25 S&P 500 Stocks By Index Weight is originally published at Insider Monkey.
