Updated on June 13th, 2022 by Bob Ciura
Spreadsheet data updated daily
Mega-cap stocks are companies with market capitalizations in excess of $200 billion. The total number of mega cap stocks varies depending upon market conditions. Right now there are over 50 mega-cap stocks, so there are plenty to choose from for investors.
These are the largest stocks in the market today and tend to have recognizable brands, in addition to fairly steady revenue, earnings, and in many cases dividends. Thus, mega cap stocks would tend to appeal to a wide variety of investors as they would typically see less volatility than smaller stocks and have more predictable forward returns.
You can download a free spreadsheet of all 50+ mega cap stocks (along with important financial metrics such as price-to-earnings ratios and dividend yields) by clicking on the link below:
This article includes a spreadsheet and table of all mega cap stocks, as well as detailed analysis on our Top 10 mega cap stocks today.
Keep reading to see the 10 best mega cap stocks analyzed in detail.
The 10 Best Mega Cap Stocks Today
Now that we’ve defined what a mega cap stock is, let’s take a look at the 10 best mega cap stocks, as defined by our Sure Analysis Research Database. The database ranks stocks’ total prospective annual returns, combining current yield, forecast earnings growth and any change in price from the valuation.
Note: The Sure Analysis Research Database is focused on income producing securities. As a result, we do not track or rank securities that don’t pay dividends. Mega caps that don’t pay dividends were excluded from the Top 10 rankings below. In addition, only U.S. based mega cap stocks were considered for the top 10 list.
We’ve screened the mega cap stocks with the best prospective returns and have provided them below, ranked in reverse order of forecast total returns. You can instantly jump to any individual stock analysis by using the links below:
- Mega Cap Stock #10: Walmart Inc. (WMT)
- Mega Cap Stock #9: Thermo Fisher (TMO)
- Mega Cap Stock #8: MasterCard Inc. (MA)
- Mega Cap Stock #7: Broadcom Inc. (AVGO)
- Mega Cap Stock #6: UnitedHealth Group (UNH)
- Mega Cap Stock #5: JP Morgan Chase (JPM)
- Mega Cap Stock #4: Merck & Company (MRK)
- Mega Cap Stock #3: Home Depot (HD)
- Mega Cap Stock #2: Verizon Communications (VZ)
- Mega Cap Stock #1: Pfizer Inc. (PFE)
Mega Cap Stock #10: Walmart Inc. (WMT)
- 5-year expected annual returns: 10.8%
Walmart traces its roots back to 1945 when Sam Walton opened his first discount store. The company has since grown into the largest retailer in the world, serving more than 230 million customers each week. Revenue will be around $595 billion this year.
Walmart reported first quarter earnings on May 17th, 2022, and results were much weaker than expected on margins and profits. Adjusted earnings-per-share came to $1.30, which was 18 cents worse than expected. That was despite revenue growing 2.4% year-over-year to $141.6 billion, which was $3.55 billion better than expected.
Comparable sales were up 3% year-over-year in the US, and up 9% on a two-year stacked basis. eCommerce growth was 1% year-over-year, but up 38% on a two-year stacked basis. Sam’s Club comparable sales rose 10.2% year-over-year, and the two-year value was +17.4%.
Operating expenses were up 45bps as a percentage of sales, primarily due to higher wages in the US. Operating income for Walmart US was $4.5 billion, down from $5.5 billion a year ago. Walmart International saw a drop from $1.2 billion to $0.8 billion, and Sam’s Club was down from $0.6 billion to $0.5 billion.
Click here to download our most recent Sure Analysis report on Walmart (preview of page 1 of 3 shown below):
Mega Cap Stock #9: Thermo Fisher (TMO)
- 5-year expected annual returns: 11.5%
Thermo Fisher Scientific Inc. is the world leader in serving complex analytical challenges, helping its customers accelerate life sciences research, improving patient diagnostics, and increasing productivity in global laboratories.
The company’s operational segments, along with their respective % of revenues, are: Diagnostics & Healthcare (28%), Pharma & Biotech (45%), Industrial applications (13%), and Academic & Government (14%). Thermo Fisher generates around $41 billion in annual sales.
Source: Investor Presentation
On February 23rd, 2022, Thermo Fisher raised its dividend by 15% to a quarterly rate of $0.30.
On April 28th, 2022, Thermo Fisher reported its Q1 results for the period ending April 2nd, 2022. The company entered fiscal 2022 on a high note, with revenues growing 19.3% to $11.82 billion. This was derived from organic revenue growth of 3%, revenue growth from acquisitions of 18%, and a headwind of 2% from foreign exchange.
The adjusted operating income margin remained quite high at 29.2% but declined from the prior-year period of 35.4% due to higher operating expenses. Thus, adjusted EPS only rose by 0.5% to $7.25, despite the strong top-line growth. Management continued to invest in its industry-leading scale in high-growth and emerging markets. During the quarter, Thermo Fisher opened a new bio-repository in Vacaville, California, to advance its cell and gene therapy services.
Last year’s acquisition of PPD, Inc., a leading provider of clinical research services for the biopharma industry, is also performing well and integrating smoothly according to management. For fiscal 2022, the company expects revenues to land between $450 million and $42.45 billion, which would result in revenue growth of 8% over the previous year. Adjusted EPS is also expected to land around $22.65, implying another year of record profitability.
Click here to download our most recent Sure Analysis report on TMO (preview of page 1 of 3 shown below):
Mega Cap Stock #8: MasterCard Inc. (MA)
- 5-year expected annual returns: 11.9%
MasterCard is a world leader in electronic payments. The company partners with 25,000 financial institutions around the world to provide an electronic payment network. MasterCard has nearly 3 billion credit and debit cards in use.
On November 30th, 2021, MasterCard raised its quarterly dividend 11.4%% to $0.49.
On April 28th, 2022, MasterCard announced first quarter results for the period ending March 31st, 2022. Revenue grew 23.8% to $5.2 billion, which was $300 million better than expected. Adjusted earnings-per-share of $2.76 compared very favorably to $1.74 in the prior year and was $0.60 ahead of estimates.
Gross dollar volumes improved 17% worldwide to $1.9 trillion, with the U.S. growing 14% while the rest of the world increased 19%. Cross border volumes surged 53% and switched transactions improved 22%. Cards in use grew 4% to just under 3 billion. Expenses increased 11% due to acquisitions, personnel expenses, advertising and data processing costs.
The adjusted operating margin expanded 460 basis points to 57.5%. The company repurchased 6.8 million shares at an average price of $353 during the quarter. Quarter-to-date, MasterCard repurchased an addition 1.7 million shares at an average price of $352. The company has $8.9 billion remaining on its share repurchase authorization.
Click here to download our most recent Sure Analysis report on MasterCard (preview of page 1 of 3 shown below):
Mega Cap Stock #7: Broadcom Inc. (AVGO)
- 5-year expected annual returns: 11.9%
Broadcom designs, develops and sells semiconductors under the following business units: Wired infrastructure, wireless communication, enterprise storage and industrial. Its offerings include data center chips, factory automation, energy systems and power generation, broadband access, and home connectivity.
Broadcom is a fabless semiconductor company, which means that the products it designs are manufactured by other companies/foundries.
Broadcom reported its first quarter (fiscal 2022) earnings results on March 3. The company generated revenues of $7.7 billion during the quarter, which represents an increase of 16% compared to the prior year’s quarter. The strong revenue growth performance was possible thanks to beating estimates in the semiconductor solutions unit, while its Infrastructure software business generated solid growth as well.
Broadcom reported earnings-per-share of $8.39 for the first quarter, which was ahead of the analyst consensus estimate. The company expects that revenues will come in at $7.9 billion during the second quarter of fiscal 2022, which is ahead of the analyst consensus and indicates that growth will remain compelling during the current fiscal year, as the forecast implies both a year-over-year increase as well as ongoing sequential growth.
Click here to download our most recent Sure Analysis report on Broadcom (preview of page 1 of 3 shown below):
Mega Cap Stock #6: UnitedHealth Group (UNH)
- 5-year expected annual returns: 12.1%
UnitedHealth dates back to 1974 when Charter Med was founded by a group of health care professionals looking for ways to expand healthcare options for consumers. UnitedHealth has certainly done that in the decades since and now offers global healthcare services to tens of millions of people via a wide array of products.
The company has two major reporting segments: UnitedHealth and Optum. The former provides global healthcare benefits to individuals, employers, and Medicare/Medicaid beneficiaries. The Optum segment is a services business that seeks to lower healthcare costs and optimize outcomes for its customers. UnitedHealth produces about $321 billion in revenue annually, making it one of the largest companies in America by either measure.
UnitedHealth reported first quarter earnings on April 14th, 2022, and results were once again much better than expected. The company posted adjusted earnings-per-share of $5.49, which was 14 cents better than expected. Likewise, revenue rose 14% year-over-year to $80.1 billion, beating estimates by $1.3 billion.
Revenue from UnitedHealthcare was up 13.6% year-over-year to $62.6 billion. Operating earnings, however, were down from $4.1 billion to $3.8 billion, despite the segment adding 1.5 million net customers in the past year. Revenue from Optum soared 19% to $43.3 billion, while operating earnings performed similarly, adding 19% to $3.2 billion. The company guided for adjusted earnings-per-share of $21.20 to $21.70 for this year.
Click here to download our most recent Sure Analysis report on UnitedHealth (preview of page 1 of 3 shown below):
Mega Cap Stock #5: JP Morgan Chase (JPM)
- 5-year expected annual returns: 12.3%
JPMorgan was founded in 1799 as one of the first commercial banks in the U.S. Since then, it has merged or acquired more than 1,200 different institutions, creating a global banking behemoth with about $124 billion in annual revenue. JPMorgan competes in every major segment of financial services, including consumer banking, commercial banking, home lending, credit cards, asset management and investment banking.
JPMorgan Chase reported first quarter earnings on April 13th, 2022, and results were somewhat mixed, with revenue coming in ahead of expectations, while earnings missed the mark.
Source: Investor Presentation
Earnings-per-share came to $2.63 in Q1, which was seven cents less than expected. In addition, earnings declined from $3.33 in Q4 of 2021, and from $4.50 in Q1 of 2021. Total revenue was down 5% year-over-year to $30.7 billion, but did beat expectations by $170 million. Provisions for credit losses were $1.46 billion, versus a benefit of $1.29 billion in Q4, and a benefit of $4.16 billion in the year-ago period.
Total loans ended the period at $1.07 trillion, essentially flat with the prior quarter. Total deposits were $2.56 trillion, up from $2.46 trillion as the company continues to take deposits without lending them. We see the loan-to-deposit ratio near 40% as a clear sign of management’s caution into the next few quarters.
Management approved a new buyback authorization of $30 billion, starting on May 1st, 2022. At the current share price, such a buyback would retire about 8% of the company’s outstanding shares.
We expect JPM to grow its earnings-per-share by 6% per year over the next five years. In addition, shares currently yield 3.3%. The stock also appears to be undervalued, with a 2022 P/E of 10.8 compared with our fair value P/E of 12.5. Total returns are expected to reach 11.4% through 2027.
Click here to download our most recent Sure Analysis report on JPM (preview of page 1 of 3 shown below):
Mega Cap Stock #4: Merck & Company (MRK)
- 5-year expected annual returns: 12.9%
Merck & Company is one of the largest healthcare companies in the world. Merck manufactures prescription medicines, vaccines, biologic therapies, and animal health products. Merck employs 67,000 people around the world and generates annual revenues of ~$57 billion.
On April 28th, 2022, Merck reported first quarter results for the period ending March 31st, 2022. Revenue grew nearly 50% to $15.9 billion, easily topping estimates by $1.26 billion. Adjusted net income of $5.4 billion, or $2.14 per share, compared very favorably to adjusted net income of $2.9 billion, or $1.16 per share, in the prior year. Pharmaceutical revenue increased 50% to $15.9 billion for the quarter, with Lagevrio sales adding $3.2 billion, up significantly from $952 million in the fourth quarter of 2021.
Keytruda, which treats cancers such as melanoma that cannot be removed by surgery and non-small cell lung cancer, remains the key driver of growth for the company, with sales growing 23% to $4.8 billion for the quarter.
Source: Investor Presentation
The product eclipsed the $17 billion mark for revenue in 2021, a 20% improvement from the previous year, and could reach $20 billion this year. Keytruda continues to see gains in market share across a number of indications. Sales for Merck’s HPV vaccine Gardasil increased 59% to $1.46 billion due to ongoing strong demand in China.
U.S. sales were higher as well, a change from prior quarters. Januvia/Janumet, which treats diabetes, fell 5% to $1.2 billion. This product will lose market exclusivity in the E.U. and China in the third quarter. Animal Health increased 4% to $1.5 billion due to higher demand for parasiticide, vaccines, and livestock products.
Merck provided an updated outlook for 2022 as well. The company expects adjusted earnings-per-share in a range of $7.24 to $7.36 per share, in-line with consensus estimates. Revenue is projected in a range of $56.9 billion to $58.1 billion, up from $56.1 billion to $57.6 billion previously.
Click here to download our most recent Sure Analysis report on Merck (preview of page 1 of 3 shown below):
Mega Cap Stock #3: Home Depot (HD)
- 5-year expected annual returns: 13.4%
Home Depot was founded in 1978 and since that time has grown into a juggernaut home improvement retailer with over 2,300 stores in the US, Canada and Mexico that generate around $150 billion in annual revenue.
Home Depot reported first quarter 2022 results on May 17th. The company reported first quarter sales of $38.9 billion, a 3.8% year-over-year increase. Comparable sales in the quarter rose 2.2%, and 1.7% in the U.S. specifically. Net earnings equated to $4.2 billion, or $4.09 per share, compared to $4.1 billion, or $3.86 per share in Q1 2021.
The company spent $2.3 billion in common stock repurchases during Q1 2022, less than the $3.8 billion spent in Q1
2021. Average ticket rose 11.4% compared to last year, from $82.37 to $91.72. Additionally, there was a 2.7% increase in sales per retail square foot, from $605.60 to $621.99.
As of the end of the first quarter, Home Depot has cash and cash equivalents equal to $2.8 billion. Leadership has upgraded guidance. For fiscal 2022, management expect sales growth and comparable sales growth of roughly 3.0%, with an operating margin of roughly 15.4%.
The company will also pay $1.6 billion in net interest expense for 2022. Finally, diluted EPS growth is expected to be mid-single digits.
Click here to download our most recent Sure Analysis report on Home Depot (preview of page 1 of 3 shown below):
Mega Cap Stock #2: Verizon Communications (VZ)
- 5-year expected annual returns: 14.8%
Verizon Communications was created by a merger between Bell Atlantic Corp and GTE Corp in June 2000. Verizon is one of the largest wireless carriers in the country. Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S. Verizon has now launched 5G Ultra-Wideband in several cities as it continues its rollout of 5G service.
On April 22nd, 2022, Verizon announced first quarter earnings for the period ending March 31st, 2022. Revenue grew 2.1% to $33.6 billion, in-line with expectations. Adjusted earnings-per-share of $1.35 compared favorably to $1.31 in the prior year and was also in-line with estimates.
The company had a net loss of 36,000 wireless postpaid phone during the quarter, but wireless revenue grew 9.5% to $18.3 billion. This is the ninth consecutive year that the company has lost postpaid phone subscribers, but this was the smallest loss in that time. Total retail connections of 143 million was the best figure for the first quarter since 2018.
You can see highlights of the company’s first-quarter performance in the image below:
Source: Investor Presentation
We expect annual returns of 15.3% for Verizon stock, comprised of 4% earnings growth, the 5.2% dividend yield, and a sizable boost from an expanding P/E multiple.
Click here to download our most recent Sure Analysis report on Verizon (preview of page 1 of 3 shown below):
Mega Cap Stock #1: Pfizer Inc. (PFE)
- 5-year expected annual returns: 15.0%
Pfizer Inc. is a global pharmaceutical company that focuses on prescription drugs and vaccines.
Pfizer’s new CEO completed a series of transactions significantly altering the company structure and strategy. Pfizer formed the GSK Consumer Healthcare Joint Venture in 2019 with GlaxoSmithKline plc (GSK), which includes Pfizer’s over-the-counter business. Pfizer owns 32% of the JV. Pfizer spun off its Upjohn segment and merged it with Mylan forming Viatris for its off patent, branded and generic medicines in 2020.
Pfizer’s top products are Eliquis, Ibrance, Prevnar 13, Enebrel (international), Sutent, Xtandi, Vyndaqel/ Vyndamax, Inlyta, Xeljanz, and Comiranty. Pfizer had revenue of $81.3B in 2021.
Pfizer reported excellent Q1 results.
Source: Investor Presentation
Companywide revenue rose 77% to $25,661M from $14,516M and adjusted diluted earnings per share rose 72% to $1.62 versus $0.95 on a year-over-year basis. Diluted GAAP earnings per share rose 59% to $1.37 from $0.86 in comparable quarters.
Total sales increased for Eliquis (+12%), Xtandi (flat), Inlyta (+2%), Vyndaqel/ Vyndamax (+35%), Sulperazon (+9%), Zithromax (+41%), Zirabev (+72%), Bosulif (+7%), Prevnar (+22%), Hospital (+69%), and Biosimilars (+14%). This was offset by declines in Xeljanz (-29%), Enebrel (-12%), Ibrance (-1%), and Sutent (-43%).
For its COVID-19 vaccine, Pfizer is the global leader with 70% market share. The company is expanding application of the mRNA technology. The drug giant is pursuing two protease inhibitor antiviral compounds, a flu vaccine, a shingles vaccine, a breast cancer therapy, hemophilia gene therapy, a Lyme vaccine, RSV Adult vaccine, and others.
Pfizer maintained revenue guidance at $98B – $102B and lowered adjusted diluted EPS to $6.25 – $6.45 for 2022.
Click here to download our most recent Sure Analysis report on Pfizer (preview of page 1 of 3 shown below):
Mega cap stocks offer investors access to the largest and generally most profitable companies in the world. The group tends to hold up better during downturns and offer investors steady streams of revenue and earnings.
Many of the stocks on this list offer investors generous dividend yields as well, but all of them have high prospective total returns. These 10 stocks, we believe, collectively offer investors an attractive blend of growth, value and yield.
Further Reading: The 7 Best Dividend Healthcare Stocks Now
Other Dividend Lists
The following lists contain many more high-quality dividend stocks:
- The Dividend Aristocrats List is comprised of 65 stocks in the S&P 500 Index with 25+ years of consecutive dividend increases.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 44 stocks with 50+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.