The Standard & Poor's 500 Index is a market-weighted index composed of 500 large-cap stocks. Apple Inc. (AAPL), for example, is the largest company in the S&P 500. Let’s take a look at the 10 largest companies in the S&P 500, including how they’re weighted, one year stock performance, dividend yield (if applicable), debt-to-equity ratio, operational cash flow (OCF) generation (trailing 12 months), whether or not the company has delivered consistent revenue and/or net income growth over the past three fiscal years, and what the future might hold for each stock.

If a company has delivered consistent revenue growth over the past three fiscal years, it will be indicated with a “Y.” If it hasn't, it will be indicated with an “N.” The same applies for net income. (For more, see: An Introduction to Stock Market Indexes.)

Top 10 Holdings

 

Weight

1-Year Stock Performance

Dividend Yield

Revenue

Net Income

Debt-to-Equity Ratio

OCF

AAPL

2.85%

-28.16%

2.39%

Y

Y

0.61

$67.53 billion

MSFT

2.22%

8.65%

2.84%

Y

N

0.63

$31.12 billion

XOM

2.05%

5.14%

3.34%

N

N

0.24

$27.16 billion

JNJ

1.74%

11.72%

2.84%

N

N

0.32

$18.17 billion

GE

1.56%

6.79%

3.11%

Y

N

1.94

$14.40 billion

FB

1.52%

47.93%

N/A

Y

Y

0.00

$9.88 billion

AMZN

1.49%

65.18%

N/A

Y

Y

1.19

$11.26 billion

BRK-B

1.49%

-1.25%

N/A

Y

Y

0.39

$33.01 billion

T

1.33%

10.78%

4.99%

Y

N

1.07

$37.04 billion

WFC

1.25%

-12.95%

3.12%

Y

N

1.70

$17.55 billion

Notice a trend in the chart above? Every company that falls within the top 10 on the S&P 500 generates significant cash flow. Additionally, none is burdened with deep debt concerns. However, only three of the companies above have delivered consistent revenue and net income growth over the past three fiscal years: Apple Inc., Facebook, Inc. and Berkshire Hathaway Inc. Interestingly, AAPL and BRK-B have depreciated over the past year. Let’s take a deeper look. (For more, see: The Biggest Risks of Investing in Facebook Stock.)

Analysis

Apple has had a rough year, but the underlying company generates such massive cash flow that its options and potential are always high. Combined with a strong balance sheet, this allows Apple to innovate. Investors and analysts have accurately pointed out that Apple hasn’t delivered a product or service that has generated excitement for consumers in seven years. That might be true, but as long as Apple continues to generate more than $67 billion in operational cash flow, the possibilities are endless. If there is a bear market for any reason, AAPL will likely take a hit because it’s discretionary, but AAPL should remain a long-term winner.

Microsoft Corporation plods along as always. Investors who seek a slow and steady pace while receiving relatively generous dividend payments might want to consider further research in MSFT. It’s not bulletproof, but it’s close, and it’s historically more resilient to market swoons than AAPL. (For more, see: Microsoft: An Activist Investment Analysis.)

Exxon Mobil Corporation has suffered consistent revenue declines due to plunging oil prices. The company must now adjust to a changing energy environment, which it likely will, but it will be a process.

Johnson & Johnson is possibly the most resilient stock and it offers an ultra-safe dividend. If the stock takes a hit for any reason, investors will still collect dividend payments while waiting for the rebound. Johnson & Johnson sells too many products that are in consistent demand for it to face any lasting headwinds.

General Electric Company is highly innovative, but in somewhat of a stealth manner. The company is trying to get the message across with advertising, but it might not be resonating. This is unfortunate because GE has the potential to be the market share leader in alternative energy in the future, which would lead to significant gains for investors. This is not around the corner and will take years to play out. (For more, see: Analyzing General Electric's Debt Ratios in 2016.)

Facebook is a dominant disrupter. It’s always ahead of the curve, which indicates sharp upper management. The company should only get bigger in future years. If its namesake brand falters, it will keep acquiring some of the best growth names. There is no telling if FB will continue to appreciate in the near future, but the underlying company is a beast.

Amazon.com, Inc. also fits into the “beast” category and is a dominant disrupter. Some investors point to AMZN being expensive because it’s trading at 290 times earnings, but that high multiple argument has been taking place for years. All the while, AMZN continues to appreciate. Amazon is not a tech bubble company. In fact, it’s on the verge of being consistently profitable. AMZN might be too high risk for some investors, but betting against it might be the biggest risk.

Berkshire Hathaway can be described with ease: Warren Buffett + 81,755% appreciation since its initial public offering. The stock might take a hit during bear markets, but it always comes back.

AT&T Inc.'s stock has been extremely volatile through the years and may not offer as much resiliency or appreciation potential as some other names on this list. 

Wells Fargo & Co. is fundamentally sound and often referred to as the safest big bank.

The Bottom Line

If a bear market transpires, it has the potential to negatively impact all the stocks above. Savvy and patient investors would see that as an opportunity to add to what they deem the strongest positions while remaining diversified. (For more, see: The Top 5 Johnson & Johnson Shareholders.)

Dan Moskowitz does not have any positions in any of the stocks mentioned above. He is currently short gold miners.