Large Cap Stocks

In the stock market, size does matter! Stocks issued by companies with a market capitalization of $10 billion or more arecalled large cap stocks. Market capitalization is the product of a company’s share price and the total number of outstanding shares. In other words, it is a measure of the current worth of the company. Market capitalization is volatile, changing on a daily basis with variations in the share price. Among the prominent large cap stocks are technology giants, financial service providers and healthcare institutions. Some of the popular large cap stocks include Microsoft, Pfizer and General Electric.

How to Find Large Cap Stocks

To identify large cap stocks, investors can refer to the major big cap stock indices, such as:

Dow Jones Wilshire U.S. Large-Cap Index: This index is a subset of the Dow Jones Wilshire 5000 Composite Index, which ranks 5,000 stocks as per their market capitalization. Shares with a rank between one and 750 are classified as large cap stocks.

S&P 500: It ranks 500 stocks that are considered to be the most profitable ones. They are selected by the S&P Index Committee, a team of leading economists and analysts from Standard & Poor’s.

Russell 200 Index: It is a subset of the Russell 3000 Index that represents one of the most widely traded stocks. The Russell200 Index is the benchmark index for the big cap stocks trading in the US. On an average, the market capitalization of the listed companies exceeds $100 billion. The database of this index is updated annually in May or June to include new members.

Dow Jones Global Titans 50 Index: It was created against the backdrop of mergers and acquisitions to reveal the globalization of blue chip securities. The index consists of mega corporations with at least one operation located outside their domestic territory. Collectively, it includes the prominent stocks trading on the NYSE, LSE, NASDAQ, Euronext and Tokyo Stock Exchange.

An investor can also refer to the Fortune 500 list of the biggest companies worldwide. One could also invest in large cap ETFs to gain exposure to large cap stocks.