Making money in the S&P 500 got tougher again in August. But not impossible.
All told, had you invested $10,000 in January and reinvested your money into the top stock currently in the S&P 500 each month this year, including Constellation Energy in August, you'd have $95,509 now, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.
That's an impressive eight-month gain of more than 830%. That's quite a feat in a year the S&P 500 is down more than 16% and has been brushing with a bear market all year. The same $10,000 invested in the S&P 500 would be worth just $8,400 now. That's a loss of $2,600.
While these eight stocks jumped the most, the S&P 500 struggled during the month. The S&P 500 dropped 3.5% in August. That's snaps the index' 9.1% gain during July. It also prolongs many index investors' pain. And to date, the S&P 500 dropped in six of the past eight months.
Biggest S&P 500 Winners For The Year
Looking at the top stocks of August tells you S&P 500 investors are trying to find stability. It's a recurring theme in the month.
Constellation Energy, a power producer in the east coast, is the No. 1 stock in the month rising more than 23%. The company yields 0.7% on top of that. It also shows how the S&P 500's mood changed in August.
The yield isn't impressive. But the company's stability is, which seems to be most important to investors now. Analysts think the company's profit will blast to more than $1 billion, or $2.98 a share, this fiscal year. If they're right, that marks a reversal from the $1.24 a share the company lost in 2021. Most impressively, though, Constellation's adjusted profit per share is expected to rise not just this year, but also in 2023, 2024, 2025 and 2026. That's a long runway of growth at a time growth is more scarce.
Also tied to the stability theme are other S&P 500 winners in August including Cardinal Health and Nielsen Holdings. Both stocks are up north of 15% during the month as investors applaud the companies' rock-solid profit track records. Just like with Constellation, analysts think Nielsen's earnings per share will rise every year until now through at least 2027. And it yields 2.8% annually to boot.
Seeing the rush into safety is a strong course correct following the rise of more speculative plays in July. Even with EPAM, the No. 1 stock in August, the business is more about long-term contracts and stable growth than fast growth. Shares of the information technology stock are up more than 22% in the month.
With the S&P 500 so uncertain, investors it seems are looking for more of a safe bet.
How To Turn $10,000 Into $95,509 In Eight Months
Top S&P 500 stock in each month of the year so far
| Month | Top S&P 500 stock | Symbol | Stock monthly % gain | Sector | S&P 500 % monthly ch. | Beg. bal. | Cumulative value of $10,000 investment in January reinvested in best stock each month |
|---|---|---|---|---|---|---|---|
| January | Halliburton | 34.4% | Energy | -5.3% | $10,000 | $13,440 | |
| February | SolarEdge | 34.1% | Information Technology | -3.1% | $13,440 | $18,023 | |
| March | Nielsen Holdings | 56.4% | Industrials | 3.6% | $18,023 | $28,188 | |
| April | 26.9% | Communication Services | -5.4% | $28,188 | $35,771 | ||
| May | Albemarle | 33.4% | Materials | -5.3% | $35,771 | $47,718 | |
| June | Dollar General | 11.4% | Consumer Discretionary | -8.4% | $47,718 | $53,158 | |
| July | Enphase Energy | 45.6% | Information Technology | 9.1% | $53,158 | $77,398 | |
| August | Constellation Energy | 23.4% | Utilities | -3.5% | $77,398 | $95,509 |
