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 | 51.5% |
Match Group Inc | MTCH | Communication Services | 47.6% |
Bio-Rad Laboratories Inc | BIO | Healthcare | 43.8% |
EPAM Systems Inc | EPAM | Information Technology | 42.7% |
Comcast Corp | CMCSA | Communication Services | 40.5% |
PayPal Holdings Inc | PYPL | Financials | 36.9% |
Baxter International Inc | BAX | Healthcare | 31.5% |
Data correct as of 17th June 2024
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1. Paycom Soft (PAYC)
- Market Cap: $8.075 B
- Fair Value Upside: 51.5%
Paycom Soft is a prominent provider of cloud-based human capital management software, offering comprehensive solutions for payroll, HR, and talent management. Known for its user-friendly interface and robust customer support, Paycom has steadily grown its market share in the competitive HR technology sector. With a strong focus on innovation and scalability, Paycom Soft continues to attract new clients and expand its product offerings.
2. Match Group Inc (MTCH)
- Market Cap: $8.382 B
- Fair Value Upside: 47.6%
Match Group dominates the online dating industry with a portfolio of popular platforms including Tinder, Match.com, and OkCupid, catering to diverse demographics worldwide. Continual innovation in user experience and matchmaking algorithms has bolstered Match Group’s market leadership and revenue growth. As online dating trends continue to rise, Match Group remains agile in adapting to evolving consumer preferences and expanding its global reach through strategic acquisitions and partnerships.
3. Bio-Rad Laboratories Inc (BIO)
- Market Cap: $8.057 B
- Fair Value Upside: 43.8%
Bio-Rad Laboratories is a key player in the life sciences and clinical diagnostics sectors, renowned for its innovative products in areas such as blood typing, microbiology, and quality control testing. The company’s commitment to research and development fuels its reputation as a pioneer in medical technology advancements. With a global presence and a focus on delivering reliable and accurate diagnostic solutions, Bio-Rad Laboratories maintains strong partnerships with healthcare providers and research institutions worldwide.
4. EPAM Systems Inc (EPAM)
- Market Cap: $10.295 B
- Fair Value Upside: 42.7%
EPAM Systems is a leading global provider of digital platform engineering and software development services, catering to Fortune 500 companies across industries such as finance, healthcare, and retail. Known for its expertise in digital transformation and customer-centric approach, EPAM enables clients to innovate and stay competitive in the rapidly evolving digital landscape.
5. Comcast Corp (CMCSA)
- Market Cap: $146.9 B
- Fair Value Upside: 40.5%
Comcast is a diversified media and technology company offering cable television, internet services, and content production through its NBCUniversal subsidiary. With a vast customer base and a strong market presence in both residential and commercial sectors, Comcast continues to invest in expanding its network infrastructure and enhancing content offerings. As consumer preferences shift towards streaming and on-demand services, Comcast adapts by launching its own streaming platform and acquiring content creators to bolster its entertainment portfolio.
6. PayPal Holdings Inc (PYPL)
- Market Cap: $63.427 B
- Fair Value Upside: 36.9%
PayPal is a leading global payments platform that facilitates online transactions for consumers and businesses worldwide. Known for its secure and user-friendly payment solutions, PayPal continues to innovate in financial technology, including digital wallets and peer-to-peer payment services through its subsidiary Venmo.
7. Baxter International Inc (BAX)
- Market Cap: $17.214 B
- Fair Value Upside: 31.5%
Baxter International is a healthcare company specializing in medical devices, pharmaceuticals, and biotechnology solutions that improve patient care and treatment outcomes. With a focus on innovation and sustainability, Baxter develops critical therapies for chronic and acute medical conditions, serving hospitals, clinics, and healthcare providers globally.
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)
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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.