Investing

The Next 15 Companies Set to Join the $100 Billion Market Cap Club

Jon C. Ogg

Published: August 7, 2018 1:00 pm

Last Updated: January 11, 2020 7:46 pm

The stock market has become enthralled with market capitalization valuations now that Apple Inc. (NASDAQ: AAPL) has reached the elusive $1 trillion mark. Several companies are ready to join Apple in that $1 trillion value club, but what this nine-year-old bull market also has brought is a whole slew of companies that are now considered to be mega-cap stocks.

The investing community is going to have to decide what actually makes for a mega-cap stock. Prior to the great recession, a mega-cap required a value of $100 billion or more. Some investors have raised that mark to the $200 billion mark now, and others are using $300 billion as the benchmark.

24/7 Wall St. has been tracking the gains and losses of many companies, and the $100 billion market capitalization mark still has many of those companies bumping up against it or within striking distance. There are also many companies that have been worth more than $100 billion before running into some stock price issues. For this reason, we have screened for 15 public companies that are likely to be in the $100 billion market cap club in the foreseeable future.

Investors need to consider that there are currently about 25 U.S. companies that have a market cap of $200 billion or more. If you expand that list to include $100 billion in market cap, there are nearly 60 companies.

The race to get to $100 billion in market cap may not happen overnight. It also goes without saying that a solid market correction would wipe out the $100 billion ambition for quite some time.

Here are the 15 companies that appear most likely to enter or get back into the $100 billion market capitalization club among U.S. stocks.

Costco: Almost There!

Costco Wholesale Corp. (NASDAQ: COST) has a market value of about $97.6 billion, but it seems pricey for value investors at 31 times expected earnings. That said, it is valued at about 0.7 times its sales, which may feel less atrocious for a growth-oriented retail play that seems to be able to keep getting more of its customers’ total retail spending dollars every year. With almost 10% earnings growth expected over the next two years, any upside earnings surprises and/or market strength should make the $100 billion market cap look easily within reach.

Bristol-Myers Squibb: Can It Recover?

Bristol-Myers Squibb Co. (NYSE: BMY) is valued at around $96 billion, based on a $59 share price, and its 52-week high of $70.05 has shown that it only has to recover a tad for the stock to rejoin the $100 billion market cap club. With its valuation of 16.5 times expected current year earnings, Bristol-Myers Squibb actually has a five-year share price high of about $75.

Qualcomm: Will Buybacks Keep Its Valuation Down?

Qualcomm Inc. (NASDAQ: QCOM) used to be in the $100 billion club, and its Apple-war, Broadcom fight and failed NXP acquisition (as well as some growth concerns) have gotten in the way for shareholders. With a value of $96.5 billion, Barclays recently upgraded the shares to Outperform and raised its target price to $80 from $64. That would imply a perceived market cap of closer to $120 billion if it comes to fruition. That said, Qualcomm’s aggressive stock buyback plan (and the accelerated tender plan) could slow its chase to the $100 billion market cap.

Thermo Fisher: Growth and a Monster Stock Chart

Thermo Fisher Scientific Inc. (NYSE: TMO) is valued at almost $95 billion, and its shares have hit an all-time high after rising and rising for more than the past five years. Maybe the shares need a correction, or maybe investors simply would like to see a correction for a better entry point, but the stock being valued at 21 times expected current year earnings isn’t likely to scare too many investors away when they consider an expected 10% earnings growth to continue.

Broadcom: Can the Chip Giant Get Out of Its Own Way?

Broadcom Inc. (NASDAQ: AVGO) also has previously been a member of the $100 billion market cap club, but its efforts to acquire Qualcomm and the current effort to acquire CA Technologies for almost $19 billion have chiseled away at its value. Broadcom investors are paying just over 10 times expected earnings, so there is some friction taking place between growth and value for one of the top global semiconductor players.

Schlumberger: Elusive Earnings Despite Rising Oil Prices

Schlumberger N.V. (NYSE: SLB) is the king of oil and gas services players, and its market cap of $92 billion (currently at a $66.50 share price) would easily be over $100 billion if the stock moved back anywhere close to its 52-week high of $80.35. Schlumberger and the rest of the oil services stocks have had a harder time getting earnings to rise with the price of oil, and that earnings trajectory in the next year or two with higher energy prices likely will determine whether Schlumberger gets to recapture the $100 billion market cap. That said, its current value is 33 times expected current year earnings.

Lockheed Martin: Bombs Away!

Lockheed Martin Corp. (NYSE: LMT) is one of the top U.S. defense companies, and its market cap of $90 billion has been above the $100 billion mark before. It’s also valued at less than 19 times earnings and is expected to grow earnings by 10% or more in the following year. If its stock gets anywhere close to the all-time high of $363.00 (compared with about $317 now) it will be back in the $100 billion market cap club.

Goldman Sachs and Morgan Stanley: The Non-Bank Banks

Goldman Sachs Group Inc. (NYSE: GS) is worth $89 billion and peer Morgan Stanley (NYSE: MS) is worth $87 billion. Both of these bank holding companies are hardly considered banking companies these days, but they both are among the top five for brokerage, trading, advisory and M&A services. All that these companies have to do is to continue rallying closer to their 52-week highs and they will be challenging the $100 billion market club again.

American Express: Please Keep Charging Away on Your Cards!

American Express Co. (NYSE: AXP) issues its own cards and caters to those with higher credit scores than some rival credit card issuers. The company’s value of $88 billion is based on a $102.70 share price, and its shares would have to rally around 13% to reach the $100 billion mark. That would be closer to a $115 share price, although the consensus analyst target price for just one-year out is over $111.

U.S. Bancorp: The Big Bank Most People Don’t Know

U.S. Bancorp (NYSE: USB) is one of the top banks in America, but it is considered to be farther back on the list of money-center and super-regional banks. Warren Buffett’s Berkshire Hathaway is the second largest holder here, with a $5 billion stake. Trading at 13 times current year expected earnings, the current $53 share price is against a $57 consensus target price and compares with a 52-week high of $58.50. The $86.5 billion market value could be facing that $100 billion mark in the next two years if it just has average share price growth.

Caterpillar: What Trade War Fears?

Caterpillar Inc. (NYSE: CAT) is the largest heavy machinery equipment colossus of them all, and the pullback in its shares to $142 has created a value of $85 billion. There is barely a 17% gain needed for the company to reach the $100 billion club, and the 52-week high of $173.24 a share is 22% higher than the current price. While Caterpillar’s stock buybacks could slow down that $100 billion ambition if the shares are retired rapidly, at least one analyst expects that its share price could rise to $200 or more. Meanwhile, Caterpillar is valued at less than 12.5 times current year earnings estimates, and it is expected to have earnings growth in 2019.

Lowe’s: Having Home Depot Envy

Lowe’s Companies Inc. (NYSE: LOW) is valued at roughly $80 billion, and its shares would have to rise 25%, without considering any share buyback drag, to hit a $100 billion market cap. That said, its value of 18 times current year expected earnings won’t scare investors away. If a rerating occurs in its favor, Lowe’s could be a huge winner because its valuation is just 1.1 times trailing revenues — roughly half what investors are paying for the larger rival Home Depot and its valuation of more than 2.2 times revenues.

BlackRock: King of the ETFs

BlackRock Inc. (NYSE: BLK) must be scratching its head over the $79 billion valuation, considering its top position in the world of exchange traded funds, mutual funds and managed accounts. With its shares trading at $490 on last look, the stock would have to rally more than 20% to hit a 52-week high of $594.52, and that would get it within $5 billion of the $100 billion market cap club. The consensus target price is still closer to $589 a share, and some analysts think it should be worth even higher than its 17-times earnings multiple today.

Kraft Heinz: Low Growth, Big Dividend

Kraft Heinz Co. (NASDAQ: KHC) may look and feel like a long-shot to get to $100 billion in market cap considering the $76 billion value based on a current $61.25 share price. It’s a very low growth position now, but it is valued at less than 17 times earnings and with almost a 4% dividend yield. That said, its 52-week high is $87.29, and this was worth over $90 in early 2017. It’s going to probably take a while, and the catalyst remains elusive, but hitting the $100 billion mark simply requires for the packaged food giant to get back to where it used to be.

Please note: Valuation metrics have been taken from Reuters, Finviz, Google Finance and Yahoo! Finance, and these sources may all show slight variations and may have different times at which they update their numbers. Consensus analyst price target information comes from Thomson Reuters.