What are the Top 20 S&P 500 Stocks?

Nowadays, trading in the stock market has gained unprecedented popularity, and many people are investing their assets in this market. Choosing the best and most profitable stock index is crucial for stock market traders. The S&P 500 index of the United States is one of the most powerful trading indices in the stock market. This index is composed of 500 of the best large companies. Therefore, one can observe a high diversity of stocks in this index and select the top 20 S&P 500 stocks for investment and trading. In the following, we will introduce the S&P 500 index and its top stocks.

Introduction to the Top 20 S&P 500 Stocks

The S&P 500 Index and Its Structure

The S&P 500 index is a type of influential and weighted index in the stock market that includes the largest stocks. Generally, investors consider this stock index as one of the most influential factors in financial decision-making. Therefore, it can be boldly said that this index also influences other stock indices worldwide.

This index uses free-floating shares to calculate the stock market value. Therefore, it evaluates the market value based on the shares used by the public. This is why knowing the top 20 S&P 500 stocks can help the majority of stock market traders make better and more valuable trades.

What Are the Limitations of the S&P 500 Index?

To use the top 20 S&P 500 stocks, you must first understand the limitations of this index and be aware of them. As mentioned earlier, this index is weighted, which is one of its limitations. This causes the prices of the stocks in this index to be slightly high and possibly above their intrinsic value. However, despite the high prices, this index alone can significantly increase the overall value of the index.

Advantages and Disadvantages of the S&P 500 Index

Before purchasing the top 20 S&P 500 stocks, it is better to know the advantages and disadvantages of trading the stocks in the S&P 500 index. This will help you purchase the best stocks based on the market index and trading conditions in the stock market. Some of the most important advantages and disadvantages of the S&P 500 index include the following:

Advantages:

The high diversity of stocks in this index leads to a varied valuation in the market. Therefore, investors can access diversified investment portfolios.
Companies with stocks in the S&P 500 index have very high liquidity. This results in ease of trading in the stock market.
The stock market considers this index very reputable and assigns it a high credit ranking.

Disadvantages:

The stocks traded in the S&P 500 index are dominated by the largest companies in the world. Therefore, they may have more limitations in offering stocks.
This index is not a suitable choice for manual investments.

Characteristics of Companies Listed in the S&P 500 Index

Before familiarizing yourself with the top 20 S&P 500 stocks, it is better to understand the companies that are included in this index. The most important features and conditions of companies that can enter the S&P 500 index are as follows:

Companies with a minimum market value and trading volume of 10 billion dollars. This indicates that the company has acceptable liquidity.
Companies whose shares can be bought and sold by the general traders and on which they can invest.
Companies listed in the S&P 500 index must be among the authorized companies in the U.S. stock market.
Additionally, companies present in the S&P 500 index need to be registered in the United States.
The recent quarterly profitability growth (company dynamics) is another condition for their presence in the S&P 500 index.
High profitability in the last 4 quarters is also a necessary condition for the presence of companies in this index.
Furthermore, companies that want to be listed in the S&P 500 index must make 10% of their shares available to the public and introduce them as public shares.

List of the Top 20 S&P 500 Stocks

As mentioned, this index consists of 500 top and powerful companies, each holding specific shares of this market. The top 20 S&P 500 stocks have significantly influenced the stock market and become the best stocks in the market. These top 20 S&P 500 stocks belong to the following companies: