Generac to join the S&P 500

Generac's headquarters in the Town of Genesee

Last updated on March 17th, 2021 at 12:51 pm

Town of Genesee-based Generac Holdings Inc. will move into the S&P 500 on March 22 as part of the index’s quarterly rebalancing efforts.

The maker of standby and portable generators and other energy technology is one of four planned additions to the S&P 500. NXP Semiconductors, Penn National Gaming and Caesars Entertainment are also moving into the index.

The four companies moving out of the S&P 500 and into the S&P MidCap 400 are Flowserve, SL Green Realty, Xerox Holdings and Vontier. Generac was previously part of the MidCap index.

To be eligible for the S&P 500, a company needs to have a market capitalization of at least $9.8 billion, a public float of at least 10% of outstanding shares and positive earnings for its most recent quarter and sum of the last four quarters.

Generac has seen a dramatic increase in its market cap in the last year. It was slightly less than $7 billion just before the COVID-19 pandemic set in last March. After an initial dip, the company’s value began climbing, reaching $10 billion by August and around $14 billion by the end of the year. It reached a peak of $22.85 billion on Feb. 19 and is currently around $20.8 billion.

In the last year, Generac’s stock has gone from a low of $75 per share to a high of $364. It was trading around $325 per share on Monday morning.

The company has benefited from what it calls the “home as a sanctuary” trend. The idea is that with more people working from home and generally spending time at home, the inconvenience of a power outage increases and so does demand for standby generators.

Generac has also benefited from high-profile power outage events, a push into the California market and expansion into clean energy technologies.

The company’s sales increased 12.7% last year to $2.49 billion and net income jumped 39% to $350 million. If the company hits its 2021 guidance, its revenue would grow to more than $3 billion this year.

Generac first crossed $2 billion in sales in 2018. It had $588 million in sales in 2009, the year before the company went public.

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Arthur Thomas
Arthur covers banking and finance and the economy at BizTimes while also leading special projects as an associate editor. He spent also five years covering manufacturing at BizTimes. He previously was managing editor at The Waukesha Freeman. He is a graduate of Carroll University and did graduate coursework at Marquette. A native of southeastern Wisconsin, he is also a nationally certified gymnastics judge and enjoys golf on the weekends.

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