Investing in companies that are larger than life

Some of the biggest companies in the world are worth more than the total value of the economies of some countries! They truly are larger than life. And investors are attracted to these multi-billion dollar businesses by their bumper profits, global reach, and industry leading products – as well as the prospect of rising share prices and dividends.

Here we look at some of these industry mammoths, outline what they’ve achieved, and highlight the investment funds buying into their stories.

The world’s largest company: Apple

The consumer electronics Apple giant started life back in the 1970s and is now the largest company in the world, courtesy of its remarkable $2.76trn market capitalisation*. This makes it almost the same size as the British economy**!

Millions of people have bought its products over the years and every new release triggers a stampede to the shops. It’s probably best known for its hugely popular and iconic iPhones. The first one appeared 16 years ago, and the world is currently bracing itself for the iPhone 15’s launch – with pre-orders beginning this week (15 September 2023).

Apple currently occupies the largest individual stock position in the T. Rowe Price US Large Cap Growth Equity fund***. This portfolio, which is managed by the experienced Taymour Tamaddon, invests in large US firms that demonstrate innovation and change.

Novo Nordisk: larger than its home country GDP

Novo Nordisk makes treatments that are relied upon by millions of people living with diabetes and obesity, as well as rare blood and endocrine diseases. The Danish company produces around 50% of the world’s insulin supply, has 36 million people using its diabetes care solutions, and conducts clinical trials in more than 50 countries****.

Perhaps unsurprisingly, the company has proved hugely popular with investors and currently has a market capitalisation of $440.22bn*. However, what’s particularly impressive is that this figure is higher than the $395.4bn gross domestic product of Denmark, according to the World Bank**.

Novo Nordisk is the largest stock position in the Comgest Growth Europe ex UK fund, with a weighting of 7.6%^. This is a high conviction fund that invests in quality, long-term growth and the managers said that, in August, the price of Novo Nordisk rose on the back of a positive readout from its SELECT study, which demonstrated meaningful cardiovascular benefits for Wegovy, its anti-obesity product. “We believe this will significantly improve the prospect of reimbursement in many markets,” they said.

Highest number of employees: Walmart

When it comes to global retailers, US-based Walmart is an industry powerhouse, boasting around 10,500 outlets in 19 countries^^. Such an international presence requires a lot of staff and Walmart employs 2.1m^^^. This is believed to be the highest number of any company.

Wal Mart debt is a top ten holding in the M&G Strategic Corporate Bond fund***, managed by Richard Woolnough. This fund invests mainly in investment grade bonds, but up to 20% of the portfolio may also be held in high yield bonds, government debt, convertibles, and preference stocks.

Biggest presence on Instagram: Nike

Being known on social media is essential these days – and sportswear giant Nike is head and shoulders above most other brands. It boasted a whopping 301 million worldwide followers on Instagram in July 2023, making it the highest placed business^^^. In fact, the only accounts with more followers were celebrities, including footballers Cristiano Ronaldo and Lionel Messi, The Rock, and various members of the Kardashian clan.

Nike is also a hugely successful business. Its most recently reported full year revenues – to the end of May 2023 – came in at $52.1bn, a 10% improvement on the previous year. The company is a long term holding in Rathbone Strategic Growth Portfolio***** and manager David Coombs told us more about the stock in this podcast back in 2021:

The Trillion Dollar club members

There are thousands of companies listed on the various international exchanges, but only six of them belong to a very special group: the trillion dollar club.

We’ve already unveiled Apple as the stock with the highest market capitalisation of $2.75trn, but in a relatively close second place is software giant Microsoft on $2.46trn*. This means its market cap is higher than the GDP or the Russian Federation, Canada, or Italy**.

The stock is currently the second largest holding in the AXA Framlington American Growth fund^, managed by Steve Kelly. He favours companies that have a competitive edge, due to factors such as innovation, unique brands, and intellectual property.

In third place – and the last one with a market cap in excess of $2trn – is Saudi Aramco, the world’s largest integrated oil and gas company. This business, which is headquartered in the city of Dhahran and employs more than 70,000 people, has a valuation of $2.16trn*. This makes it more than FOUR times larger than its nearest rival, Exxon Mobil, which comes in with $468.37bn*.

The final spots are occupied by Alphabet (Google’s parent) with $1.71trn*, retailer Amazon on $1.46trn*, and NVIDIA, a leading US name in artificial intelligence computing with $1.1bn*.

You can get access to both Alphabet and Amazon via the Brown Advisory US Flexible Equity fund***, which has delivered good returns in both up and down markets. NVIDIA, meanwhile, is the second largest stock in the Baillie Gifford American fund with an 8% weighting^.

*Source: Companiesmarketcap.com, 13 September 2023

**Source: World Bank, 2022 figures

***Source: fund factsheet, 31 July 2023

****Source: Novo Nordisk

*****Source: FE fundinfo, 31 July 2023

^Source: fund factsheet, 31 August 2023

^^Source: Walmart

^^^Source: Statistica