Connect with us

Best Stocks

Best Consumer Defensive Stocks

Published

on

Best Consumer Defensive Stocks

151.25 1.695 (1.13%)

9.38M

416.37B

148.19 – 153.1

132.01 – 160.77

Start Investing

Advertisement

64.52 -0.225 (-0.35%)

20.05M

279.67B

64.04 – 65.365

52.28 – 67.2

Advertisement

Start Investing

Nestle (OTC: NSRGY)

With a 150-year-plus history, Nestle is the largest food and beverage manufacturer in the world by sales, generating more than CHF 90 billion in annual revenue. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle also owns just over 20% of French cosmetics firm L’Oreal. The company has a vast portfolio of global products, with more than 30 brands each achieving more than CHF 1 billion in sales annually and a geographic presence that spans almost 190 countries.

121.13 -3.67 (-2.94%)

Advertisement

57.39K

334.27B

120.37 – 122.49

118 – 141.95

With a 150-year-plus history, Nestle is the largest food and beverage manufacturer in the world by sales, generating more than CHF 90 billion in annual revenue. Its diverse product portfolio includes brands such as Nestle, Nescafe, Perrier, Pure Life, and Purina. Nestle also owns just over 20% of French cosmetics firm L’Oreal. The company has a vast portfolio of global products, with more than 30 brands each achieving more than CHF 1 billion in sales annually and a geographic presence that spans almost 190 countries.

Start Investing

Advertisement

Costco Wholesale (NASDAQ: COST)

498.83 -4.53 (-0.9%)

3.28M

221.09B

494.34 – 507.05

371.1141 – 612.27

Advertisement

Start Investing

Albertsons Companies (NYSE: ACI)

Albertsons is the second-largest traditional grocer in America, operating 2,277 stores under more than 20 banners in 34 states (as of the end of fiscal 2020). Around 75% of stores have pharmacies, while nearly 20% also sell fuel. Albertsons has a significant private-label operation, accounting for around 20% of sales (excluding fuel). While its own brand assortment is mainly manufactured by third parties, Albertsons operates 20 food production plants (as of the end of fiscal 2020). Albertsons is a top-two grocer in two thirds of its major markets (as of early 2021, according to company data), and virtually all of its sales come from the United States.

30.14 0.03 (0.1%)

Advertisement

2.30M

15.76B

29.69 – 30.29

18.5144 – 37.99

Albertsons is the second-largest traditional grocer in America, operating 2,277 stores under more than 20 banners in 34 states (as of the end of fiscal 2020). Around 75% of stores have pharmacies, while nearly 20% also sell fuel. Albertsons has a significant private-label operation, accounting for around 20% of sales (excluding fuel). While its own brand assortment is mainly manufactured by third parties, Albertsons operates 20 food production plants (as of the end of fiscal 2020). Albertsons is a top-two grocer in two thirds of its major markets (as of early 2021, according to company data), and virtually all of its sales come from the United States.

Start Investing

Advertisement

Benzinga’s Proprietary Penny Stock Service is Finally Here

Get YOUR penny stock insights delivered straight to your inbox.

Advertisement

Biggest Consumer Defensive Movers of the Day

The movers of the day list may help you identify promising consumer defensive stock. Stock prices often react from news about foreign markets or competition.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.

Advertisement

Defensive stock trading is an all-weather type of investment. It can keep your pockets stuffed through market turbulence, even when the wider market is struggling. People can’t cut back on consumer staples (think beverage and tobacco products, household goods, personal products and food and drug retailers). 

Here are 5 consumer defensive stocks that deserve your attention.

Overview: Consumer Defensive Stocks

The consumer sector produces products people need almost on a daily basis. Consumer defensive stocks are great investments in virtually any economic environment, including economic slowdowns.

Unlike cyclical stocks, which are highly dependent on the economic cycle, defensive stocks generate stable profits through all stages of the economic cycle. The simple idea behind investing in defensive stocks is to shield against significant decreases in share prices, which occur during either bear markets or market corrections.

Although consumer defensive sectors offer price stability through the economic cycle, the tradeoff is that they experience less growth during market upswings compared to higher-risk, cyclical sectors. The industry groups considered to be defensive include:

  • Consumer staples
  • Healthcare
  • Commodities
  • Utilities

Best Online Brokers for Consumer Defensive Stock

Online brokers don’t just let you execute and track stock trades. They provide extensive research material, tools to backtest strategies and charting capabilities for better market analysis. Here’s a list of the best brokers in the industry.

Features to Look for in Consumer Defensive Stocks

  • Market share is a huge determinant of stock profitability. It’s the proportion of an industry’s total output, capacity or sales that a company is responsible for over a given period. Capturing a dominant share of the market is valuable for 2 main reasons — companies you invest in that capture the lion’s share of the market tend to offer the highest profits and keep up with competitive threats. A leading brand will easily secure a lot of shelf space with retailers. The aim is to increase its sales margin faster than the larger industry, therefore increasing market share over time.  
  • Same-store sales growth helps put revenue data in perspective. Also referred to as comparable store sales, it’s the measure of revenue and sales growth from existing store locations. This metric helps you assess the operating momentum of a business, whether it attracts huge customer traffic and stands out from the competition. Weak comparable store sales could be a sign of scaling business challenges.
  • Profit margins may help you evaluate the earnings power of consumer staple companies. Top consumer staples companies post market-leading profit margins attributable to large sales bases, valuable brands and effective operating structures. Higher margins on this metric often indicate stronger earnings and a greater stock pricing power. 

Defend Your Portfolio Against a Stock Market Shock

Having a few consumer defensive stocks can help you hedge against stock market shocks. Although these stocks aren’t the best performers in a bull market, they usually go up when the market slips. A portfolio containing defensives is more likely to offer a dividend. A regular income is always nice to have, especially during tough economic times.

Advertisement

Best Stocks

Best Telecommunications Stocks Right Now

Published

on

Best Telecommunications Stocks Right Now

American Tower (NYSE: AMT)

American Tower owns and operates more than 220,000 cell towers throughout the U.S., Asia, Latin America, Europe, and the Middle East. It also owns and/or operates 25 data centers in eight U.S. markets after acquiring CoreSite. On its towers, the company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company operates more than 40,000 towers in the U.S., which accounted for more than half of its total revenue in 2021. Outside the U.S., American Tower’s greatest presence is in India and Brazil, where it operates roughly 75,000 and 19,000 towers, respectively. American Tower operates as a real estate investment trust.

230.92 -2.08 (-0.89%)

1.62M

105.36B

229.51 – 233.3

220 – 303.72

Advertisement

American Tower owns and operates more than 220,000 cell towers throughout the U.S., Asia, Latin America, Europe, and the Middle East. It also owns and/or operates 25 data centers in eight U.S. markets after acquiring CoreSite. On its towers, the company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company operates more than 40,000 towers in the U.S., which accounted for more than half of its total revenue in 2021. Outside the U.S., American Tower’s greatest presence is in India and Brazil, where it operates roughly 75,000 and 19,000 towers, respectively. American Tower operates as a real estate investment trust.

Start Investing

Liberty Broadband (NASDAQ: LBRDA)

112.44 -1.33 (-1.17%)

20.62K

Advertisement

18.30B

111.51 – 114.705

103.31 – 188.76

Start Investing

Advertisement

Lumen Technologies (NYSE: LUMN)

With 450,000 route miles of fiber, including over 35,000 route miles of subsea fiber connecting Europe, Asia, and Latin America, Lumen Technologies is one of the United States’ largest telecommunications carriers serving global enterprises. Its merger with Level 3 further shifted the company’s operations toward businesses (over 70% of revenue) and away from its legacy consumer business. Lumen offers businesses a full menu of communications services, providing colocation and data center services, data transportation, and end-user phone and internet service. On the consumer side, Lumen provides broadband and phone service across 37 states, where it has 4.5 million broadband customers.

11.41 -0.48 (-4.04%)

10.67M

11.79B

11.32 – 11.88

9.31 – 15.45

Advertisement

With 450,000 route miles of fiber, including over 35,000 route miles of subsea fiber connecting Europe, Asia, and Latin America, Lumen Technologies is one of the United States’ largest telecommunications carriers serving global enterprises. Its merger with Level 3 further shifted the company’s operations toward businesses (over 70% of revenue) and away from its legacy consumer business. Lumen offers businesses a full menu of communications services, providing colocation and data center services, data transportation, and end-user phone and internet service. On the consumer side, Lumen provides broadband and phone service across 37 states, where it has 4.5 million broadband customers.

Start Investing

20.26 -0.31 (-1.51%)

43.34M

145.04B

Advertisement

20.125 – 20.63

18.81 – 33.88

Start Investing

Advertisement

America Movil (NYSE: AMOV)

America Movil is the largest telecom carrier in Latin America, serving about 280 million wireless customers across the region. It also provides fixed-line phone, internet access, and television services in most of the countries it serves. Mexico is the firm’s largest market, providing about 40% of service revenue. Movil dominates the Mexican wireless market with about 63% customer share and also serves about half of fixed-line internet access customers in the country. Brazil, its second most important market, provides about 30% of service revenue. Movil sold its low-margin wireless resale business in the U.S. to Verizon in 2021 and now owns a 1.4% stake in the U.S. telecom giant. The firm also holds a 51% stake in Telekom Austria and a 20% stake in Dutch carrier KPN.

20.20 0.36 (1.81%)

3.11K

64.71B

19.84 – 20.2

14.3918 – 22.39

America Movil is the largest telecom carrier in Latin America, serving about 280 million wireless customers across the region. It also provides fixed-line phone, internet access, and television services in most of the countries it serves. Mexico is the firm’s largest market, providing about 40% of service revenue. Movil dominates the Mexican wireless market with about 63% customer share and also serves about half of fixed-line internet access customers in the country. Brazil, its second most important market, provides about 30% of service revenue. Movil sold its low-margin wireless resale business in the U.S. to Verizon in 2021 and now owns a 1.4% stake in the U.S. telecom giant. The firm also holds a 51% stake in Telekom Austria and a 20% stake in Dutch carrier KPN.

Advertisement

Start Investing

Advertisement

Benzinga’s Proprietary Penny Stock Service is Finally Here

Get YOUR penny stock insights delivered straight to your inbox.

Telecommunications Stock Movers of the Day

Taking advantage of daily market volatility in the telecommunications sector? Take a look at the top movers below.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

Advertisement

Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.

The telecommunications industry includes a range of companies that provide residential and commercial communications solutions. It could be a good time to invest in the sector — operations have expanded in recent years. 

Check out our guide to learn more before you invest. We’ll also introduce you to some of the best telecommunications stocks worth watching. 

Overview: Telecommunications Stocks

At its root, any type of telecommunications system has 3 essential parts:

  • A transmitter that receives information and converts it into a signal to travel over a long distance.
  • A transmission medium or channel that carries the signal to its destination.
  • A receiver that accepts the signal and converts it back into useful information for the receiving party.

The 1st type of telecommunication most investors think of is cellphones and 4G or 5G cellphone service. Cellphones do make up a major segment of the telecommunication market, but other products and services telecommunications companies offer include landline service, broadband internet services, cable television and satellite television.

Continued growth in the telecommunication industry makes it attractive for investors. Many telecommunications companies also offer hot stocks under $10 — a great choice if you’re a value investor.

Best Online Brokers for Telecommunications Stock

You need to open an account with a brokerage firm whether you’re searching for long-term telecommunications giants or looking to pick up a few stocks under $5. 

A broker is a person or company that you authorize to buy and sell assets on your behalf. You’ll need a broker before you can start choosing stocks and funds because the general public can’t buy or sell stocks directly.

Consider our top choices below when you’re ready to choose a broker. 

Advertisement

Features to Look for in Telecommunications Stock

Knowing how to evaluate telecommunications stocks can help you choose the right investments for your goals. Here are a few characteristics to look for when you begin.

  • An earnings per share value that indicates the company is profitable: You can calculate a company’s earnings per share (EPS) value by dividing its current revenue minus dividends by the company’s current number of outstanding shares. Many telecommunications companies have huge operating expenses, so these types of companies may not show the sky-high annual profit that other companies do. Look for stocks with a positive EPS value — this indicates the company remains profitable.
  • A safe dividend yield: Many investors look to the telecommunications industry for dividend payments to create a passive stream of income. While telecommunications corporations often offer dividends (that are sometimes quite high), you should only invest your money in companies that can sustain these dividends.

Don’t only look at the dollar amount the stock pays out per year or per quarter when you compare stocks. Instead, look at the company’s dividend yield. The dividend yield is calculated by dividing the company’s annual dividend by its current share price. Be wary of stocks that offer a dividend yield above 10%. This may indicate that a dividend cut is coming soon.

  • A company that pays attention to shifting technology: Technology is shifting at a faster rate than ever before and consumers expect phone and internet providers to keep up. From investing in 5G technology to using satellite technology to expand television services to areas where cable television isn’t available, look for companies that focus on growing communications technology. 

Bolster Your Investments

Investing in telecommunications stocks can be a great way to shore up any stock portfolio. You’ll find great dividend potential and promising high-tech products. 

It’s important to remember that even large-cap telecommunication stocks aren’t risk-free investments. They should never make up the majority of your portfolio. Use telecommunication stocks to complement a larger portfolio of total market index funds, large-cap mutual funds and S&P 500 funds. 

Continue Reading

Best Stocks

Mid Cap Stocks

Published

on

Mid Cap Stocks

Digital Turbine (NASDAQ: APPS)

Digital Turbine Inc through its subsidiaries is engaged in media and mobile communications, delivering end-to-end products and solutions for mobile operators, application advertisers, device original equipment manufacturers and other third parties to enable them to effectively monetize mobile content. The company’s operates in one business which is Advertising. The Advertising business is comprised of two businesses Operator and OEM, and Advertiser and Publisher.

27.10 1.36 (5.28%)

2.32M

2.63B

25.51 – 27.66

21.6 – 93.98

Advertisement

Digital Turbine Inc through its subsidiaries is engaged in media and mobile communications, delivering end-to-end products and solutions for mobile operators, application advertisers, device original equipment manufacturers and other third parties to enable them to effectively monetize mobile content. The company’s operates in one business which is Advertising. The Advertising business is comprised of two businesses Operator and OEM, and Advertiser and Publisher.

Start Investing

SPS Commerce (NASDAQ: SPSC)

SPS Commerce Inc is a provider of cloud-based supply chain management solutions for suppliers, retailers, and distributors. Its solutions are delivered through the SPS Commerce platform and provide integrations and retail performance analytics to its customers. Trading Partner Fulfillment, Trading partner Analytics, and Trading Partner Assortment are the firm’s top products. These products include fulfillment automation, sell-through performance analysis, and sourcing capabilities. The group derives revenue from recurring monthly fees and set-up fees. A majority of the firm’s revenue is generated in the United States. Other products of the company include Trading Partner Sourcing and Trading Partner Community Development.

103.83 -0.215 (-0.21%)

Advertisement

12.49K

3.75B

103.16 – 107.48

91.6055 – 174.4173

SPS Commerce Inc is a provider of cloud-based supply chain management solutions for suppliers, retailers, and distributors. Its solutions are delivered through the SPS Commerce platform and provide integrations and retail performance analytics to its customers. Trading Partner Fulfillment, Trading partner Analytics, and Trading Partner Assortment are the firm’s top products. These products include fulfillment automation, sell-through performance analysis, and sourcing capabilities. The group derives revenue from recurring monthly fees and set-up fees. A majority of the firm’s revenue is generated in the United States. Other products of the company include Trading Partner Sourcing and Trading Partner Community Development.

Start Investing

Advertisement

Silicon Laboratories (NASDAQ: SLAB)

Silicon Laboratories Inc develops semiconductors, software, and system solutions for the “Internet of Things,” Internet infrastructure, industrial control, consumer, and automotive markets. The company operates through one segment, mixed-signal analog intensive products, consisting of diverse product areas, which the company groups into four categories: Internet of Things, broadcast, infrastructure and access. The Internet of Things category is the largest contributor to the company’s total revenue. Geographically, the company mainly operates in the United States and China, with the U.S. the largest source of revenue.

141.70 2.15 (1.54%)

29.16K

5.18B

140.14 – 144.71

Advertisement

120.15 – 211.982

Silicon Laboratories Inc develops semiconductors, software, and system solutions for the “Internet of Things,” Internet infrastructure, industrial control, consumer, and automotive markets. The company operates through one segment, mixed-signal analog intensive products, consisting of diverse product areas, which the company groups into four categories: Internet of Things, broadcast, infrastructure and access. The Internet of Things category is the largest contributor to the company’s total revenue. Geographically, the company mainly operates in the United States and China, with the U.S. the largest source of revenue.

Start Investing

57.13 0.655 (1.16%)

Advertisement

1.31M

3.52B

55.11 – 58.85

51.2618 – 183.88

Start Investing

Advertisement

Teledyne Technologies (NYSE: TDY)

405.68 9.58 (2.42%)

19.60K

19.00B

400.6825 – 407.53

374.65 – 493.97

Advertisement

Start Investing

Advertisement

Benzinga’s Proprietary Penny Stock Service is Finally Here

Get YOUR penny stock insights delivered straight to your inbox.

Biggest Mid Cap Stock Movers of the Day

Taking advantage of market volatility today? Browse the top movers in the mid-cap sector below.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

Advertisement
Symbol Last Price Change % Change Trade
FR 53.11 -0.17 -0.32% Trade
Symbol Last Price Change % Change Trade
FIVE 140 -1 -0.71% Trade
Symbol Last Price Change % Change Trade
Symbol Last Price Change % Change Trade
Advertisement

Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.

The term “mid cap” stands for “middle capitalization.” Mid-cap stocks usually have a market capitalization between $2 billion and $10 billion. Mid-cap stocks can be beneficial because they have more potential for growth than large-cap stocks but are usually more transparent and stable than small-cap or micro-cap stocks.

Are you thinking about adding a few mid-cap stocks to your portfolio but aren’t sure which are worth your money? Our guide to mid-cap stocks will help you identify these stocks, evaluate their financials and choose which to invest in. We’ll also introduce you to a few mid-cap stocks that investors keep their eyes on for this year. 

Overview: Mid Cap Stocks

The “cap” in mid cap refers to a company’s total market capitalization. You can calculate a company’s market capitalization by multiplying the total number of outstanding shares of stock by the current share price. Most investors consider mid-cap stocks to have market capitalizations between $1 billion and $10 billion. 

Companies with market capitalizations below $1 billion are typically considered small-cap stocks, while companies with market capitalizations above $10 billion are usually referred to as large-cap stocks.

Mid-cap stocks offer a few benefits over large-cap and small-cap companies. Mid-cap stocks are established businesses, which makes them easier to find information on. This means that it’s much more difficult for mid-cap companies to fall into price manipulation schemes or to hide financial data. 

Mid-cap stocks are also small enough to show more year-after-year growth than large-cap stocks, which can make them a great choice for investors with limited funds and who want more potential for profit. The right mid-cap stocks add a level of diversification to your portfolio without the high level of risk that often accompanies small-cap and penny stocks. 

Best Online Brokers for Mid Cap Stocks

No matter if you’re looking for mid-cap stocks with the highest potential for growth or you’re only interested in stocks under $5 for short-term gains, you’ll need to place your buy and sell orders through a broker. If you don’t already have a brokerage account, consider a few of our favorite online brokers below. 

Advertisement

Features to Look for in Mid Cap Stock

Like large-cap stocks, it’s easy to find analysis and financial information on most mid-cap stocks. Look for these 3 essential characteristics before you invest.

  • A history of yearly growth: Unlike large-cap stocks, mid-cap stocks have the potential to significantly grow their operations on a yearly or even monthly basis. When you search for mid-cap companies to invest in, look for ones that have a proven track record of growth.
  • A positive earnings per share value: A company’s earnings per share (EPS) value is calculated by dividing the current revenue minus dividends by the total number of outstanding shares. A mid cap company might have some debt, especially for the first few years on the market. However, if a company has a positive EPS, it means that the debt is under control and the corporation is remaining profitable.
  • A safe, sustainable dividend yield: If you’re investing to create a passive stream of income, you might turn to dividend-producing mid-cap stocks because they tend to be more affordable than their large-cap counterparts. While it can be tempting to shop for stocks only by their annual dollar payout, you should instead pay attention to the dividend yield.

A company’s dividend yield is equal to the current annual dividend divided by its current share price. A dividend yield above 10% may indicate that the dividend is unsustainable and may be cut in the near future. 

Adding Mid Cap Stocks to Your Portfolio

Mid-cap stocks can make an exciting addition to any portfolio. No matter if you’re ready to invest hundreds of dollars or you’re simply looking for mid-cap stocks under $10, remember that mid-cap stocks can be riskier than investing in large-cap stocks or total market index funds. 

If you do decide to add a few mid-cap stocks to your portfolio, try to search for stocks within a few different industries to limit your risk. 

Continue Reading

Best Stocks

Best Large Cap Stocks Right Now

Published

on

Best Large Cap Stocks Right Now

Caterpillar (NYSE: CAT)

Caterpillar is an iconic manufacturer of heavy equipment, power solutions, and locomotives. It is currently the world’s largest manufacturer of heavy equipment with over 13% market share in 2021. The company is divided into four reportable segments: construction industries, resource industries, energy and transportation, and Caterpillar Financial Services. Its products are available through a dealer network that covers the globe with over 2,000 branches maintained by 168 dealers. Caterpillar Financial Services provides retail financing for machinery and engines to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Caterpillar product sales.

213.12 5.935 (2.86%)

2.27M

113.68B

209.14 – 213.77

179.67 – 246.69

Advertisement

Caterpillar is an iconic manufacturer of heavy equipment, power solutions, and locomotives. It is currently the world’s largest manufacturer of heavy equipment with over 13% market share in 2021. The company is divided into four reportable segments: construction industries, resource industries, energy and transportation, and Caterpillar Financial Services. Its products are available through a dealer network that covers the globe with over 2,000 branches maintained by 168 dealers. Caterpillar Financial Services provides retail financing for machinery and engines to its customers, in addition to wholesale financing for dealers, which increases the likelihood of Caterpillar product sales.

Start Investing

Exxon Mobil (NYSE: XOM)

ExxonMobil is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2021, it produced 2.3 million barrels of liquids and 8.5 billion cubic feet of natural gas per day. At the end of 2021, reserves were 18.5 billion barrels of oil equivalent, 66% of which were liquids. The company is the world’s largest refiner with a total global refining capacity of 4.6 million barrels of oil per day and one of the world’s largest manufacturers of commodity and specialty chemicals.

92.05 1.1 (1.21%)

Advertisement

23.10M

388.97B

91.12 – 92.45

52.1 – 92.05

ExxonMobil is an integrated oil and gas company that explores for, produces, and refines oil around the world. In 2021, it produced 2.3 million barrels of liquids and 8.5 billion cubic feet of natural gas per day. At the end of 2021, reserves were 18.5 billion barrels of oil equivalent, 66% of which were liquids. The company is the world’s largest refiner with a total global refining capacity of 4.6 million barrels of oil per day and one of the world’s largest manufacturers of commodity and specialty chemicals.

Start Investing

Advertisement

149.24 3.7 (2.54%)

78.17M

2,415.48B

146.68 – 149.77

122.86 – 182.94

Advertisement

Start Investing

241.69 -2.35 (-0.96%)

3.20M

178.74B

Advertisement

239.46 – 247

217.675 – 271.15

Start Investing

138.37 3.34 (2.47%)

Advertisement

4.37M

124.45B

135.64 – 138.37

114.56 – 152.84

Start Investing

Advertisement

Benzinga’s Proprietary Penny Stock Service is Finally Here

Get YOUR penny stock insights delivered straight to your inbox.

Advertisement

Biggest Large Cap Stock Movers of the Day

Looking for the most volatile stocks of the day? Browse our top movers in the large cap market below.

The data provided below is intended for educational purposes only, we have included the session dates for your reference.

Symbol Last Price Change % Change Trade
WMT 137.3 -10.91 -7.37% Trade
VZ 48.93 -0.11 -0.23% Trade
ABBV 155.33 -0.14 -0.1% Trade
Advertisement

Want to jump straight to the best? Most of our users prefer Interactive Brokers for stock trading.

Large-cap stocks are stocks issued by corporations that have major influence over the economy. The “cap” in large-cap refers to the company’s “market capitalization,” which is equal to the company’s current share price multiplied by its outstanding number of shares. As the name suggests, large-cap stocks have very high market capitalizations — most large-cap stocks have capitalizations well above $10 billion.

Though you won’t find many stocks under $5 when you shop for large-cap stocks, these stocks can add a layer of safety and stability to your profile. Our guide to large-cap stocks will help you understand a little more about what sets these companies apart from the rest. We’ll also introduce you to a few ideas when it comes to large-cap investment opportunities. 

Overview: Large Cap Stocks

A large-cap stock is a stock with a market capitalization over $10 billion. The best-known companies in the United States all have large cap stocks — and large-cap stocks make up around 90% of the total U.S. market. Some examples of large-cap stocks that are also household names include:

  • Coca-Cola (NYSE: KO)
  • Walmart (NYSE: WMT)
  • Facebook (NASDAQ: FB)
  • Clorox (NYSE: CLX)
  • Unilever (NYSE: UL)

Large-cap stocks often have higher share prices, but they come with a number of benefits. Some of the biggest reasons why investors choose large cap stocks include:

  • Stability: Companies that issue large-cap stocks are usually market leaders with very little price fluctuations. This makes them a safer investment when compared to penny stocks or stocks under $10.
  • Transparency: Large-cap stocks typically have very transparent earnings reports and corporate structures. You can almost always find information, analysis and expert opinions on these stocks without doing hours of research, making it very difficult to get involved in a scam or price manipulation.
  • Higher average trading volumes: Large-cap stocks have higher average daily trading volumes than mid-cap and small-cap stocks. This means that if you need to sell your investments, you’re much more likely to be able to unload your shares quickly.

Many large-cap stocks are also considered to be blue chip stocks as well. A blue chip stock is the stock of a company that has a long history of profitability, very little debt and an overall very consistent business in place. Blue chip stocks usually have high levels of diversification as well — if they have a rough quarter or year, their stock is less likely to see a drop in price.

Some investors are attracted to large-cap stocks because the companies that issue them often have the stability and profit to offer consistent dividends. A dividend is a portion of a company’s profit that is paid out to shareholders. A company might issue dividends on an annual, monthly or quarterly basis, and the amount of money shareholders receive during each payment is directly dependent upon the number of shares of stock they hold. 

For example, if Company A is offering a dividend of $1 and you own 1,000 shares of the stock, you’ll receive $1,000 on the payment date. Though few companies are required to pay dividends, many large cap stocks elect to. 

Best Online Brokers for Large Cap Stock

No matter if you’re purchasing thousands of dollars’ worth of large-cap stock or you’re browsing stocks under $20 to swing trade, you’ll need to place your buy or sell orders through a broker. A broker is a person or company who’s licensed to purchase or sell stocks and other securities on behalf of another person. Though most people think of the frantic brokers of Wall Street when they imagine a stockbroker, most brokerage firms now allow you to do all of your buying and selling online through a single platform.

Don’t already have a brokerage account? Consider a few of our favorites listed below. 

Advertisement

Features to Look for in Large Cap Stock

Large cap stocks are usually more expensive than mid- or small-cap stocks. Get the most out of your money by searching for these 3 features before you invest.

  • A high earnings per share value: A company’s earnings per share (EPS) value is equal to its current profit divided by the number of shares of stock outstanding. When you invest, be sure to select a stock with a solid, positive EPS — this indicates that the company is consistently profitable and isn’t paying out more money than it’s bringing in.  
  • Consistently met targets: Each quarter, analysts set a “consensus EPS” for every large-cap company. A consensus EPS is an expert estimation of what a company should announce as its EPS before its quarterly earnings report is released. When you shop for large cap stocks, look for companies that consistently meet or beat the consensus — this indicates that there are less likely to be hidden financial issues within the company.
  • A solid dividend yield: Instead of looking for large cap stocks that pay the highest dividends, search for ones with a solid dividend yield. A dividend yield is equal to a company’s annual dividend payout divided by its current share price. Dividend yields above 10% are usually considered to be riskier investments. 

Leveraging Your Portfolio With Large Cap Stocks

Many investors put their money into large-cap stocks because they want to purchase securities that will safely hold their investment capital. While large cap stocks are generally much more stable and see fewer price fluctuations than stocks from companies with smaller market capitalizations, large-cap stocks aren’t the only way to invest in the long-term. 

In addition to large-cap stocks, consider investing in a few total market or S&P 500 funds. These securities offer a higher level of diversification than buying individual large-cap stocks, which can better protect your investment.  

With companies like Apple and Amazon hitting the mythical trillion-dollar market capitalization in 2018, you may have considered getting in on some of the action. Large cap companies have market caps of over $10 billion and include giants like Alphabet, Microsoft, and Intel. There are more options than you think.

Large cap stocks are much less risky than small cap and mid cap stocks, but the stocks can still find modest, regular gains.

Continue Reading

Trending