The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) allows an investor to hold a diversified portfolio without having to buy individual stocks. This is possible because the SPY ETF tracks the S&P 500 Index (SPX) and thus represents a diversified basket of large-cap U.S. stocks.
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Key Positives for Investing in the SPY ETF
One of the major factors worth considering is the SPY ETF’s considerably low fees. It has an expense ratio (the cost of managing the ETF) of 0.09%, which makes it an attractive investment.
Remarkably, the ETF has delivered an average annualized return of 12.1% in the past decade as of March 2023. Moreover, SPY pays a 1.48% annual dividend yield, which enhances investors’ returns over the long run.
Is SPY Stock a Buy, According to Analysts?
SPY has a Moderate Buy consensus rating on TipRanks. Further, the average SPY stock price target of $480.71 implies 9.4% upside potential. Among the 6,312 analysts providing ratings on its 504 holdings, 59.46% have given a Buy rating, 35.12% have assigned a Hold rating, and 5.42% have given a Sell rating.
Additionally, TipRanks’ easy-to-read technical summary signals indicate that SPY ETF stock is a Buy at current levels.
Moreover, according to TipRanks’ Smart Score System, SPY has a Smart Score of 8 out of 10, which indicates that the ETF could outperform the broader market over the long term. It is worth highlighting that more than 50% of the holdings boast an Outperform Smart Score (i.e., a score of 8 or higher).
Several of the SPY ETF’s holdings have witnessed strong returns over the past year. Among these, the following 10 stocks are key winners as they gained over 60%. Importantly, analysts see further upside potential in most of these stocks.
- First Solar (FSLR)
- Nvidia Corporation (NVDA)
- Royal Caribbean Cruises (RCL)
- Netflix, Inc. (NFLX)
- Axon Enterprise, Inc. (AXON)
- Fair Isaac Corporation (FICO)
- General Electric (GE)
- Pultegroup (PHM)
- D.R. Horton (DHI)
- Wynn Resorts Limited (WYNN)
