How big is a large-cap stock?
Large cap refers to a company with a market capitalization value of more than $10 billion. Also referred to as “big cap,” large cap describes a class of popular stocks preferred by investors for their stability. Video Player is loading.
A large-cap company has a market capitalization of over $10 billion. A mid-cap company has a market capitalization between $2 billion and $10 billion, and a small-cap company has less than $2 billion in market capitalization.
Large-cap stocks are shares of the largest U.S. companies, or those with market capitalizations of $10 billion or more. Large-caps are generally safer investments than their mid- and small-cap counterparts because the companies are more established, but their stocks may not offer the same potential for high returns.
Large-cap corporations, or those with larger market capitalizations of $10 billion or more, tend to grow more slowly than small caps, which have values between $250 million and $2 billion.
Large-cap stocks are represented by the S&P 500; mid-cap stocks by the S&P MidCap 400 Index; and small-cap stocks by the S&P SmallCap 600 Index. These indexes are unmanaged and do not take into account the fees, expenses, and taxes associated with investing.
Large-cap stocks are generally considered to be safer investments than their mid- and small-cap stock counterparts because they are larger, more established companies with a proven track record. Some of the biggest names in business are large-cap stocks – Apple, Microsoft and Alphabet, for example.
Mid-cap stocks are shares of companies with total market capitalization in the range of about $2 billion to $10 billion.
- Adani Green Energy Ltd. Power Generation & Distribution.
- AU Small Finance Bank Ltd. Banks.
- Polycab India Ltd. Cables.
- KEI Industries Ltd. Cables.
- Avanti Feeds Ltd. FMCG.
- Bajaj Finance Ltd. Finance.
- Britannia Industries Ltd. FMCG.
- Adani Total Gas Ltd. Gas Distribution.
Drawbacks: Slower growth: Large-cap stocks may not offer the same growth potential as smaller companies, limiting potential capital appreciation.
| Stock Symbol | Market Price | 1-Year Return |
|---|---|---|
| BAJFINANCE | 7,235.05 | 28.80% |
| HINDALCO | 561.85 | 40.40% |
| TATASTEEL | 156.20 | 50.43% |
| HDFCLIFE | 632.50 | 27.70% |
Why are large-cap stocks better?
Large cap stocks are valued at greater than $10 billion in the market, making them more stable and mature investments. As a result, large cap stocks typically have lower volatility, greater analyst coverage, and perhaps a steady dividend stream.
Lower risk: Compared to mid-cap and small-cap funds, large-cap funds invest in well-established companies with larger market capitalizations. These companies tend to be more financially stable and resilient to market fluctuations, offering a lower overall risk profile.
Large-cap companies are those that have a market capitalization of over $10 billion. The S&P 500 measures the overall risk, return, and performance of the large-cap equities market.
Lack of Global Diversification
The S&P 500 is all US-domiciled companies that over the last ~40 years have accounted for ~50% of all global stocks. By just owning the S&P 500 you miss out on almost half of the global opportunity set which is another ~10,000 public companies.
Meanwhile, if you only invest in S&P 500 ETFs, you won't beat the broad market. Rather, you can expect your portfolio's performance to be in line with that of the broad market. But that's not necessarily a bad thing. See, over the past 50 years, the S&P 500 has delivered an average annual 10% return.
Because the S&P 500 contains hundreds of large companies and represents the lion's share of total stock market value, it is considered a much better gauge of how the market is performing, even though it excludes thousands of smaller and midsize companies.
Market cap: $260.78 Billion
As of March 2024 Coca-Cola has a market cap of $260.78 Billion. This makes Coca-Cola the world's 40th most valuable company by market cap according to our data.
| Mid-cap movers from March 14 to April 1 | |
|---|---|
| Gainers | Losers |
| Indus Towers +33% | Apollo Tyres -5% |
| Torrent Power +25% | HPCL -3% |
| SJVN +24% | MRF -2% |
How big is a small-cap stock?
Small-cap stocks are shares of companies with total market capitalization in the range of about $300 million to $2 billion. Small-cap companies have the potential for high rates of growth, making them appealing investments, though their stocks may experience more volatility and pose higher risks to investors.
Small-cap stocks are the stocks of companies whose market capitalization is roughly between $300 million and $2 billion.
Large-cap companies are typically a safer investment, especially during a downturn in the business cycle, as they are much more likely to weather changes without significant harm.
The small firm effect theory posits that smaller firms with lower market capitalizations tend to outperform larger companies. The argument is that smaller firms typically are more nimble and able to grow much faster than larger companies.
In general, large-cap stocks tend to be less volatile than small-cap stocks. This is because small-cap stocks generally represent younger, less-established companies that do not have the financial resources of larger companies and are thus more vulnerable to a downturn in the economy.
