S&P 500 Stocks at 52-Week Highs: A Narrow List with Strong Underlying Business

Just 20 S&P 500 stocks have reached their 52-week highs as of August 21, a relatively narrow group despite the index's 3.7% gain over the last month.

The list is dominated by health care companies, with 10 out of the 20 names coming from this sector. The largest company on the list, Visa (V), comes from outside this group and currently trades at $670.84 billion in market capitalization.

While a few stocks like Merck (MRK) are trading at high price-to-earnings ratios, others like Visa have strong underlying business results, with revenue growth of 14.4% over the last twelve months and an operating margin of 65.6%. The key takeaway is that a stock's price can rest on different business performance.

Investors should treat the high as a prompt to investigate further and look for stocks whose managements have raised their outlooks, which tends to have staying power. A healthcare ETF like XLV is also one way to own the group's strength without betting on individual names.