Apple was in news recently because its market cap crossed the $800 billion mark. Apple is number one company right now in terms of market valuation. We were wondering how other companies rank on market valuation. So, we did a quick research on the market valuations of S&P 500 companies. The S&P 500 stock market index, maintained by S&P Dow Jones Indices, consists of 500 large-cap companies traded on US stock exchanges.
We pulled out the list of S&P 500 companies from Wikipedia. Then, we pulled out the latest market cap (as of May 12, 2017) of each of the 500 companies using Google Finance function. Then, we sorted the list of S&P 500 companies by market cap. This gave us the ranking of the 500 companies by their market cap. Then, we used all this information to prepare the diagram below for top 50 US companies by market value.
One of the key insights from this exercise was that Top 10% of the S&P 500 companies hold nearly 50% of the total market cap. If we sort the companies by market cap, we find that the top 50 companies hold nearly half of the total market cap of S&P 500 companies. The combined market cap of top 50 companies is $10.7 trillion, whereas the total market cap of all 500 companies is $21.8 trillion.
Here are some observations on the 50 most valuable US companies by their sector.
Most Valuable Companies in Technology Sector
The Top-5 companies in the list of US top-50 most valuable companies are from Technology sector. Apple, Alphabet (parent of Google), Microsoft, Amazon, and Facebook are the top-5 most valued companies. Their market capitalization are $825 billion, $654 billion, $527 billion, $466 billion, and $437 billion respectively. These 5 companies, 1% of the S&P 500 companies, hold 13.3% of the total market cap of S&P 500 companies. Their combined market cap is $2.9 trillion, whereas the total market cap of all S&P 500 companies is $21.8 trillion. Berkshire Hathaway and Exxon Mobil, which have been in the top-5 for a long time, have slipped to sixth and seventh positions respectively.
We recently wrote an article about the top 10 technology companies in US by 2016 revenues. The top-4 companies in the list are Apple, Amazon, Alphabet, and Microsoft. The next 6 companies are IBM, Intel, HP Enterprise, Cisco, HP Inc, and Oracle. However, if we look at the market valuations, these companies are not in Top-5. Instead, we find Facebook there. What surprised us was the market cap comparison of Facebook and IBM. Facebook is three-times bigger than IBM in market valuation. Clearly, market doesn’t see more value in investing in IBM, which has survived over a century. Market sees more potential in a decade old company, despite the fact that Facebook current revenues are nearly one-third of that of IBM.
Intel and Cisco have a market cap of $167 billion each. Both the companies are leaders in their respective market segments, namely, semiconductor and networking equipment. They dominate these markets. No other player comes even close to them in terms of revenues. But, the combined market cap of Intel and Cisco is less than that of Facebook.
Amazon market cap is twice of that of Walmart. Amazon market cap is $466 billion and Walmart market cap is $228 billion. In July 2016, we did an analysis of revenues and profits of Amazon versus Walmart from 1995 to 2015. Walmart has delivered consistent profits over years. Amazon had hardly made profits. Walmart pays dividends. Amazon doesn’t. Yet market values Amazon twice that of Walmart. Market believes much more in the future of Amazon than Walmart. Another observation was that Amazon market cap is more than the combined market cap of Walmart and Home Depot.
Most Valuable Companies in Healthcare Sector
Johnson & Johnson (J&J) leads the market valuation of companies in Healthcare sector. J&J has a market valuation of $334 billion and is ranked eighth. We recently wrote an article about the top 20 Healthcare companies in US by 2016 revenues. Mckesson, UnitedHealth, CVS Health, Amerisourcebergen, Cardinal Health, Walgreen Boots, Express Scripts, Anthem were ahead of J&J in 2016 revenues. However, in market valuation, J&J is the leader. Other Healthcare sector companies that find place in the top-50 US companies by market value are: Pfizer (rank 18), Merck (rank 26), United Health (rank 30), Amgen (rank 36), Medtronic (rank 38), Abbvie (rank 41), Celgene (rank 47), Walgreens Boots Alliance (rank 48), and Bristol Myers Squibb (rank 49).
Most Valuable companies in Financials Sector
Berkshire Hathaway (BRK) leads leads the market valuation of companies in the Financials sector. BRK has a market valuation of $403 billion and is ranked sixth. The four US banking majors – JP Morgan Chase, Wells Fargo, Bank of America, and Citigroup – are ranked 9th, 10th, 12th, and 27th respectively. Visa and Mastercard also find place in the top-50 with the 16th and 34th ranks respectively.
Most Valuable Companies in Energy Sector
Only three companies in the Energy sector find a place in the top-50 US companies by market value. These are Exxon Mobil (rank 7), Chevron (rank 17), and Schlumberger (rank 43). The fall in the oil prices during the last few years have not only impacted the revenues and profits of the Energy companies, but also their market capitalization.
Most Valuable Companies in Industrials Sector
General Electric (GE) leads leads the market valuation of companies in the Industrials sector. GE has a market valuation of $240 billion and is ranked eleventh. Other industrials companies have less than half of the market cap of GE. The other companies that find a place in the top-50 US companies by market value are: 3M (rank 37), Boeing (rank 39), Honeywell (rank 42), United Technologies (rank 45), and United Parcel Service (rank 50).
Most Valuable Companies in Retail, Consumer Goods, and Restaurants
We have a mix of companies here. Walmart (rank 14) and Home Depot (rank 19) are the most valued retail companies. McDonald’s (rank 35) is the most valued restaurant. Procter & Gamble (rank 15) is the most valued personal products company. Kraft Heinz (rank 40) is the most valued packaged foods and meats company.
The Coca-Cola Company (rank 21) is valued more than PepsiCo (rank 31).
Most Valuable Companies in Telecom and Media Sectors
AT&T and Verizon are the two companies that dominate the Telecom Services sector. These companies are ranked 13 and 20 respectively in the US top-50 list. The two media conglomerates that find a place in the US top-50 list are Comcast and The Walt Disney Company. They are ranked 23 and 25 respectively.
In the commentary above, we have talked about 49 of the 50 companies. Can you guess which company did we miss?