The S&P 500 is Making a Change by Adding This Little-known Industrial Stock

Dow Jones08-01 05:53

Ferguson Enterprises' stock was rallying nearly 9% on its inclusion in the benchmark index

Ferguson Enterprises' headquarters in Virginia. The wholesale distributor reported sales of more than $30 billion last year.

A wholesale distributor of plumbing, heating and other products for construction trades is set to become the newest member of the S&P 500 index.

S&P Dow Jones Indices said late Friday that Ferguson Enterprises $(FERG)$ will join the S&P 500 SPX before the market open on Aug. 5. Ferguson replaces videogame company Electronic Arts $(EA)$, which is being taken private.

Shares of Ferguson rallied more than 9% in the extended trading session Friday after the news. The company, worth $45 billion and headquartered in Newport News, Va., edged out better-known names such as social-media company Reddit (RDDT) and fuel-cell maker Bloom Energy $(BE)$ for a spot in the benchmark index.

Ferguson in May reported first-quarter sales of $7.5 billion, and analysts polled by FactSet expect the distributor to unveil sales of $8.7 billion when it reports second-quarter results next month. The company had $31.3 billion in annual sales last year.

A spot in the S&P 500 is a coveted place for companies, as it brings their shares to a much broader range of investors, including passive funds that track indexes and actively managed funds that may have limitations on where they can invest.

Ferguson gets the nod after a June index rebalance saw chip maker Marvell Technology $(MRVL)$ and electronics manufacturer Flex $(FLEX)$ join the S&P.

-Claudia Assis

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