How Many Companies Have Ever Been in the S&P 500 Index? Discover the 5 Longest-Tenured Stocks in 2023
When it comes to the major U.S. stock indexes, the S&P 500 index is widely regarded as a barometer of the overall stock market’s performance. Seen as an indicator of how large corporations are performing, it consists of the top 500 companies in the US stock market. But how many companies have ever been a component of the index, and which 5 stocks have been there the longest?
The S&P 500 index is updated periodically to reflect the top 500 companies in the US stock market. As of 2014, about 186 changes have been made to the composition of the index since its creation in 1957, so over 686 companies have ever made it to the S&P 500 index over the years. Five of the longest-lasting stocks in the index include AT&T, General Electric, ExxonMobil, Coca-Cola, and Procter & Gamble.
In this article, we will be talking about the S&P 500, its history, the companies in it, and the ones that have been there the longest. We will discuss the topic under the following subheadings:
What is the S&P 500 Index?
The S&P 500 index is a US stock market index that represents the 500 largest companies in the US stock market. Also known as the Standard & Poor’s 500, the index is a registered trademark of the joint venture S&P Dow Jones Indices. It comprises 504 common stocks which are issued by 500 large-cap companies traded on American stock exchanges, which includes the 30 components of the Dow Jones Industrial Average.
Representing about 80 percent of the American equity market by capitalization, the S&P 500 index is generally considered the best indicator of how U.S. stocks are performing overall. So, it is not only a statistical measure of the performance of America’s 500 largest stocks, but also, it is generally seen as a common benchmark against which portfolio performance can be evaluated.
The index is weighted by free-float market capitalization (share price times the number of shares outstanding), so more valuable companies account for relatively more weight in the index. In other words, each listed company doesn’t simply represent 1/500th of the index. Rather, a company’s valuation determines how much influence it has over the index’s performance. So, massive companies such as Apple, Microsoft, and Amazon have a greater impact on the S&P 500 index than relatively smaller companies like Macy’s (NYSE: M) and Harley-Davidson (NYSE: HOG).
The index constituents and the constituent weights are updated regularly using rules published by S&P Dow Jones Indices. Although called the S&P 500, the index contains 504 stocks because it includes two share classes of stock from 4 of its component companies.
The history Of the S&P 500 Index
The S&P 500 index was first compiled in the late 1950s as the most popular benchmark for measuring how large-cap companies are performing in the United States. In fact, it was created on March 4, 1957, to replace its predecessor, a 90-stock composite price index that was created by Standard Statistics in 1926. Comprising the stocks of 500 leading U.S. companies, the newly introduced S&P 500 index had a total market capitalization of $172 billion at the time it was created, tracking the performance of 425 industrial, 15 rail, and 60 utility stocks.
In 1958, the index S&P 500 ended the year up 38.06 percent, which was its best year in terms of percentage gain, and by June 4, 1968, it closed above 100 for the first time. From 1969 to 1981, the index gradually declined, as the U.S. economy endured stagnant growth and high inflation.
During the 2008 financial crisis and the Great Recession, the S&P 500 index fell 46.13% between October 2007 to March 2009, but by March 2013, it had recovered all of its losses. The coronavirus pandemic in 2020 sent the world into a recession and equity markets reeling as the S&P 500 plummeted nearly 20%. However, from the second half of 2020, the S&P bounced back, with the great performance of the tech and communication sector, and reached many all-time highs in 2021.
From the time of its creation to date, the index is continually being updated with new additions each year that meets its requirements for earnings, market value, and liquidity while removing others that do not meet the requirements, or that are eliminated by corporate changes or mergers.
Some of the first companies added at the creation of the S&P 500 Index
When the 50th anniversary of the index was celebrated in 2007, the company behind the index, S&P Dow Jones Indices, put out a press release with a list of the 86 companies that were on the original list that were still on the list in 2007 — though the names may have been a little different. Here are a few of the more recognizable names on the list:
- 3M Co
- Merck & Co
- Abbott Laboratories
- Allegheny Energy Inc
- Exxon Mobil Corp
- Ford Motor Co
- PepsiCo Inc
- General Dynamics Corp
- Pfizer Inc
- Boeing Co
- General Electric Co
- Burlington Northern
- General Motors Corp
- Pitney Bowes Inc
- Campbell Soup Co
- Goodyear Tire
- Procter & Gamble Co
- Caterpillar Inc Rubber Co
- Coca-Cola Co
- Colgate-Palmolive Co
- Heinz (H J) Co
- Hershey Co
- International Paper Co
- Deere & Co
- Dow Chemical Kroger Co
- Du Pont (E I) de Nemours
- McGraw-Hill Companies
How many companies have ever been in the S&P 500 Index?
The S&P 500 index is updated periodically to reflect the top 500 companies in the US stock market. Most times, this is done yearly, with new additions each year. The companies that meet the index’s requirements for earnings, market value, and liquidity are added, while the existing components that no longer meet the requirements, or that are eliminated by corporate changes or mergers, are removed.
As of 2014, about 186 changes have been made to the composition of the S&P 500 index since its creation in 1957. Given that the index always comprises the stocks of 500 top companies, there must have been more than 686 companies that have ever made it to the S&P 500 index over the years, as of 2014.
For companies to retain their places in the index, they must remain among the top 500 companies in the US stock market, which means that they must outperform all the other companies. Constituent companies that don’t perform well are replaced by good-performing companies that make it to the top 500.
Which 5 stocks have been in the S&P 500 the longest?
Among the 500 companies that debuted the index, only a few are still components of the index today. Five of those longest-lasting stocks in the S&P 500 index include
- General Electric: As far as the S&P 500 index components go, General Electric (NYSE: GE) is a veritable relic. It’s one of the few companies that has been on the index since it was formed in 1957.
- AT&T: then known as American Telephone and Telegraph, AT&T was the heaviest-weighted stock in the S&P 500 index in 1957. The company is still in the index and it is about the 11th-largest company in the index.
- ExxonMobil: This company has been a member of the S&P 500 index since the beginning. However, its name then was Standard Oil Co. of New Jersey. It changed its name to “Exxon” in 1972, and ExxonMobil in 1999 following its megamerger with Mobil.
- Coca-Cola Co: The multinational beverage corporation, best known for its non-alcoholic soda drink (Coca-Cola), has been a component of the S&P 500 index from the time of its creation.
- Procter & Gamble: Best known for its Tide detergent, Crest toothpaste, and dozens of other consumer products, Procter & Gamble (NYSE: PG) was one of the original components of the S&P 500 index, and it’s been there ever since.
The top-weighted companies in the S&P index
Interestingly, none of the above-listed longest-lasting stocks in the index is among the largest nine stocks with the most weight in the index. As of September 30, 2021, the nine largest companies on the list of S&P 500 companies accounted for 28.1% of the market capitalization of the index. In order of weighting, they include Apple, Microsoft, Alphabet (including both class A & C shares), Amazon.com, Meta Platforms, Tesla, Nvidia, Berkshire Hathaway, and JPMorgan Chase.
What does the S&P 500 mean for the US economy?
Currently, the market capitalization of S&P index components represents about 80 percent of the American equity market capitalization. So, it is not only a statistical measure of the performance of America’s 500 largest stocks, but also a measure of the American stock markets.
Given the size of the index (as a percentage of the market cap), it is generally considered the best indicator of the U.S. stock market performance. The index is commonly used as the broad market benchmark against which portfolio performance can be evaluated.
FAQ:
– How is the S&P 500 Index composed, and what does it represent?
The index comprises 504 common stocks issued by 500 large-cap companies traded on American stock exchanges. It represents about 80% of the American equity market by capitalization, making it a crucial measure of US stock market performance.
– What is the history of the S&P 500 Index?
The S&P 500 Index was created on March 4, 1957, to replace its predecessor. It started with a total market capitalization of $172 billion, tracking the performance of 425 industrial, 15 rail, and 60 utility stocks. Over the years, it has evolved, surviving economic downturns and crises, including the 2008 financial crisis and the COVID-19 pandemic.
– What does the S&P 500 mean for the US economy?
The S&P 500 Index is a significant indicator of the US economy, representing about 80% of the American equity market capitalization. It serves as a benchmark for evaluating the performance of the US stock market and is commonly used to assess portfolio performance.