Carvana, CRH, and Comfort Systems USA to Join S&P 500

(Dreamstime)

CRH, Carvana, and Comfort Systems USA will join the S&P 500 as part of the benchmark index’s quarterly rebalancing, said S&P Dow Jones Indices after Friday’s market close.

LKQ, Solstice Advanced Materials, and Mohawk Industries —companies with some of the smallest market values in the S&P 500—will be removed from the large-cap S&P 500 and demoted to the S&P 600 small-cap benchmark.

The changes will take effect prior to the open of trading on Monday, Dec. 22. Index funds need a short window to rebalance their portfolios without blowing up liquidity.

The S&P 500 index is rebalanced each quarter, with new companies added if they meet the criteria of S&P Dow Jones Indices, which oversees the index. The admission committee looks at factors such as market value, profitability, and sector representation.

CRH, with a market capitalization of about $80 billion, is a provider of construction aggregates and cement. Carvana, an online used car retailer, has a market value of $87 billion. In Friday’s after-hours trading, the stocks shot up 7.1% and 9.2%, respectively, followings news of their inclusion in the S&P 500.

CRH and Carvana were prime candidates to join the S&P 500 since they were among the largest companies by market value that were not in the index prior to Friday’s rebalancing.

Comfort Systems USA, which provides mechanical and electrical contracting services, such as HVAC and plumbing, was the more surprising pick. The stock has grown more than fivefold over the past two years, with market value of just $35.3 billion as of Friday’s close. Shares rose 1.5% in after-hours trading.

Andrew Bary contributed to this report.

Write to Evie Liu at evie.liu@barrons.com