There is no application process. No way to beg or plead your way onto the index of 502 mostly domestic companies. Companies just need to meet the rigid requirements maintained by a selection committee of economists and stock analysts at American financial services giant Standard & Poor’s.
The day before the listing took effect Dec. 4, 2014, The Wall Street Journal reported that news of its inclusion boosted RCL shares by 5.77 percent to $76.46.
“It is a terrific honor to join the Standard and Poor’s (S&P) 500, and we could not be more proud,” Adam Goldstein, president and chief operating officer of Royal Caribbean Cruises Ltd., wrote in a memo to employees.
Goldstein went on to call the news “a direct result of the laser-like focus each and every employee has placed on reducing costs, improving yields, and most importantly, delivering an amazing experience to our guests.”
To be selected for the index, a company must have:
- Headquarters in the U.S.
- A market cap of at least $5.3 billion
- At least 50 percent of its stock held by the public
- Four consecutive quarters of positive earnings
- A stock price of at least $1 per share
- A profile that contributes to the overall balance of sectors within the S&P 500
- A listing on either the New York Stock Exchange or the NASDAQ.
Online market tracker TheStreet reported that its own analysts rated the cruiseline’s stock as a “buy” with a score of A+ “based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate.”
“The company’s strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.”
In taking its place in the index, Royal Caribbean replaced Bemis Company, Inc., a global packaging manufacturer, which was moved to the S&P MidCap 400.