S&P 500 companies are often seen as solid investments because they are financially stable, large, and their stocks are easy to trade. These well-known U.S. companies provide a mix of investments across different industries, which helps spread out risk. Over time, the S&P 500 has shown strong returns, mirroring the overall growth and strength of the U.S. economy.
By carefully screening S&P 500 stocks, investors can pinpoint stocks with strong growth potential. Using InvestingPro filters and Fair Value metrics, we found undervalued stocks in the S&P 500. This helps investors find good deals in the market, pointing out stocks that could go up in price by more than 30%. These metrics show how much these companies could grow.
What is InvestingPro Fair Value?
InvestingPro Fair Value is a metric designed to estimate the true worth of a stock. Using this value, users can assess whether a stock is currently undervalued or overvalued by comparing its current market price to its intrinsic worth.
S&P 500 Criteria
For a company to be selected by the Index Committee and included in the S&P 500 index, it must satisfy these requirements:
- The company must be headquartered in the United States.
- Its market capitalization should be a minimum of $8.2 billion.
- The company’s shares need to exhibit high liquidity.
- At least 50% of its outstanding shares should be available for public trading.
- It must have positive earnings in the most recent quarter.
- The total earnings over the last four quarters must also be positive.
Methodology: How Did We Choose These Stocks?
Fair Value Assessment: We considered only stocks presenting a Fair Value upside potential of at least 30%, based on InvestingPro’s fair value assessment.
Fair Value Uncertainty (InvestingPro): To further refine our selection, we focused exclusively on companies categorized with either Low or Medium Fair Value uncertainty levels.
S&P 500 Index Inclusion: We prioritized stocks listed in the S&P 500 for this screener.
Top S&P 500 Stocks
Company Name | Stock Symbol | Sector | Fair Value Upside |
Paycom Soft | PAYC | Industrials | 51.8% |
Match Group Inc | MTCH | Communication Services | 46.5% |
EPAM Systems Inc | EPAM | Information Technology | 38.6% |
Comcast Corp | CMCSA | Communication Services | 36.8% |
PayPal Holdings Inc | PYPL | Financials | 37.6% |
Lululemon Athletica Inc | LULU | Healthcare | 33.4% |
![](https://academy.education.investing.com/wp-content/uploads/2024/03/Original.png)
- Paycom Soft (PAYC)
Fair Value Upside: 51.8%
Market Cap: 8.395 B
Paycom Soft, headquartered in Oklahoma City, is a leading provider of cloud-based human capital management (HCM) software. Its innovative platform offers businesses an integrated solution for payroll, talent management, and human resources, driving significant improvements in workforce efficiency.
- Match Group Inc (MTCH)
Fair Value Upside: 46.5%
Market Cap: 8.576 B
Match Group Inc, based in Dallas, Texas, is a prominent name in the online dating industry, owning a portfolio of popular dating services such as Tinder, Match.com, and OkCupid. The company continues to expand its global reach and user base, leveraging technology to enhance the user experience and maintain its market leadership.
- EPAM Systems Inc (EPAM)
Fair Value Upside: 38.6%
Market Cap: 11.218 B
EPAM Systems Inc, founded in 1993, is a global leader in digital platform engineering and software development services. With its headquarters in Newtown, Pennsylvania, EPAM helps clients transform their businesses through advanced technology solutions and has built a reputation for delivering complex software engineering projects.
- Comcast Corp (CMCSA)
Fair Value Upside: 36.8%
Market Cap: 150.2 B
Comcast Corp, based in Philadelphia, Pennsylvania, is a major player in the telecommunications and media industries, known for its Xfinity brand of cable television, internet, and phone services. The company also owns NBCUniversal, enhancing its footprint in the entertainment sector through a broad range of content offerings and media assets.
- PayPal Holdings Inc (PYPL)
Fair Value Upside: 37.6%
Market Cap: 63.045 B
PayPal Holdings Inc, headquartered in San Jose, California, is a leading digital payments platform, facilitating online money transfers and serving as an electronic alternative to traditional paper methods. PayPal’s suite of services includes peer-to-peer payments, merchant services, and e-commerce solutions, positioning it at the forefront of the fintech revolution.
- Lululemon Athletica Inc (LULU)
Fair Value Upside: 33.4%
Market Cap: 36.383 B
Lululemon Athletica Inc, based in Vancouver, Canada, is a high-end athletic apparel company known for its stylish and functional workout clothing. The brand has cultivated a loyal customer base by emphasizing quality, performance, and a strong community-centric approach, making it a leader in the activewear market.
How to the Best S&P 500 Stocks
You can find undervalued S&P 500 stocks using Investing Pro. Here are the steps:
- Click on the Screener tool.
- Select ‘Fair Value Uncertainty (InvestingPro)’ as a filter parameter on the Screener page, and select ‘Low’ and Medium’
- Add Index Membership, is part of ‘S&P 500’
- Add a filter for ‘InvestingPro Fair Value Upside’ above 30%
![](https://academy.education.investing.com/wp-content/uploads/2024/06/Screener-1-Undervalued-SP-500-Stocks-1024x401.jpg)
- You can then see the list of all the companies falling in the desired screener filters’ range arranged in a descending order.
![](https://academy.education.investing.com/wp-content/uploads/2024/06/Screener-2-Undervalued-SP-500-Stocks-1024x408.jpg)
Unlock All Undervalued S&P 500 Stocks 🚀🚀🚀
For easy access, visit our saved undervalued S&P 500 stock screener.
S&P 500 Stocks FAQ (Frequently Asked Questions)
What is the S&P 500?
The S&P 500 is a stock market index that tracks the 500 largest publicly traded companies in the United States, weighted by market capitalization. Find out more with our guide to the S&P 500.
Can individual investors buy shares of the S&P 500 index itself?
No, individual investors cannot directly buy shares of the S&P 500 index itself. However, they can invest in mutual funds, exchange-traded funds (ETFs), or index funds that replicate the performance of the S&P 500.
How often does the composition of the S&P 500 change?
The composition of the S&P 500 can change due to corporate actions such as mergers, acquisitions, or when a company no longer meets the index criteria. Changes are announced by S&P Dow Jones Indices.
What is market capitalization and why is it important in the S&P 500?
Market capitalization (market cap) is the total market value of a company’s outstanding shares of stock. It is important in the S&P 500 because the index is weighted by market cap, meaning larger companies have a greater impact on its performance. View the current largest companies by market cap.
What are the risks associated with investing in S&P 500 stocks?
Risks include market volatility, economic downturns affecting company earnings, sector-specific risks, and risks associated with individual companies within the index.
Is it possible to invest in specific sectors or industries within the S&P 500?
Yes, investors can choose to invest in specific sectors or industries within the S&P 500 through sector-specific ETFs, mutual funds, or individual stock selection.