S&P 500 – Top Ten from Uncle Sam

Tracker/ETF | Review | North America | Large | 13 Mins Read | by

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The S&P 500 is the United States’ blue-chip stock index. It offers a bet on US entrepreneurialism and business acumen. This is a bet that has paid off in spades. A quick look at the top ten S&P 500 stocks reveals why.

The four largest S&P 500 companies on 2nd April 2019 were Microsoft, Apple, Amazon and Facebook (in size order). Microsoft and Apple are 43 years old, Amazon is 24 years old and Facebook is only 15 years old

The owner of Google, Alphabet, has two classes of shares. If we add them together it would be the thirds largest S&P 500 company. Google is 20 years old and together with Facebook forms part of an online advertising duopoly.

All five companies have strong market positions and in many cases dominate their markets. Four of the five businesses generate an EBIT margin of over 20% while Amazon’s EBIT margin is expected to be close to 10% in 2021.

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An S&P 500 passive fund: iShares S&P 500 Acc (CSP1)

Source: SharePad

 

1) S&P 500 top ten and Alphabet

The two share classes of Alphabet are a mystery.  I tried to Google it with little success (go figure).  Presumably, they are added together to get the value of the company.  This is because they must both represent shares in issue.

Of course, stating the "top ten" in the article is a bit misleading.  There are only nine companies given the two Alphabet share classes.  However, it is what ETF providers like iShares do and so I decided to remain on script.

If anyone has figured out the two share classes of Alphabet do let me know!  I'll look at again sometime to see if I can crack it.

S&P 500 – Top Ten from Uncle Sam

Tracker/ETF | Review | North America | Large | 13 Mins Read

The S&P 500 is the United States’ blue-chip stock index. It offers a bet on US entrepreneurialism and business acumen. This is a bet that has paid off in spades. A quick look at the top ten S&P 500 stocks reveals why.

The four largest S&P 500 companies on 2nd April 2019 were Microsoft, Apple, Amazon and Facebook (in size order). Microsoft and Apple are 43 years old, Amazon is 24 years old and Facebook is only 15 years old

The owner of Google, Alphabet, has two classes of shares. If we add them together it would be the thirds largest S&P 500 company. Google is 20 years old and together with Facebook forms part of an online advertising duopoly.

All five companies have strong market positions and in many cases dominate their markets. Four of the five businesses generate an EBIT margin of over 20% while Amazon’s EBIT margin is expected to be close to 10% in 2021.

Sign up to read full article.

Get FREE access now

Already a member? Login