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Old Dominion (ODFL) to Join Prestigious S&P 500 Benchmark

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Old Dominion Freight Line (ODFL - Free Report) is set to join the coveted S&P 500, before market open on Dec 9. Notably, this Thomasville, NC-based transportation company will replace SunTrust Banks (STI - Free Report) , which is expected to be acquired by another S&P 500 member — BB&T Corporation . In the S&P SmallCap 600 Index, Old Dominion’s spot will be filled by Cabot Microelectronics Corporation .

With a portfolio of 500 companies, accounting for more than 80% coverage of the available market capitalization, the S&P 500 is widely considered the best single measure of large cap U.S. equities. The list is periodically modified to do away with the stocks that have been acquired by other companies, delisted from the stock exchange or failed to meet the mandatory criteria of the Index.

A company needs to fulfill certain criteria to be included in the S&P 500. Firstly, its market capitalization should be at least $8.2 billion. As of Dec 2, 2019, the market capitalization of Old Dominion Freight Line was $15.29 billion. Moreover, the ratio of annual dollar value traded to float adjusted market capitalization should be 1 or more. Also, the company should trade at least 250,000 shares in each of the six months leading to the evaluation date. Additionally, the U.S. portion of fixed assets and revenues must comprise a plurality of the total but need not be above 50%.

When there is an inconsistency among these factors, assets establish plurality. Revenues determine plurality in the event of incomplete asset information.

Furthermore, the stock should be primarily listed on an eligible U.S. exchange like the NYSE (including NYSE Arca and NYSE MKT), the NASDAQ Global Select Market, the NASDAQ Select Market or the NASDAQ Capital Market. ADRs are not qualified for addition. There are other criteria that a company must accomplish to be listed on the S&P 500 scale. For example, it should file 10-K annual reports.

Old Dominion Freight Line, carrying a Zacks Rank #3 (Hold), duly fulfills all these criteria and has thereby been added to the S&P 500 GICS (Global Industry Classification Standard) Trucking Sub-Industry Index. The GICS economic sector and sub-industry are “Industrials” and Trucking, respectively. We note that as of Nov 19, 2019, the "Information Technology" sector had the highest representation (22.8%) on the S&P 500 Index. The Industrials sector came sixth in terms of representation (9.3%) while the Materials sector was least represented (2.7%).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

As of Nov 29, 2019,the mean market capitalization of the constituents was $54.32 billion, while the median market cap was approximately $22.91 billion.

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