Large Cap stands for “Large market capitalization”. Market Capitalization is the estimation of a company’s value or size through multiplying the number of shares outstanding times the share price of the stock. An example of this can be demonstrated through looking at Walt Disney. Walt Disney has 1.544 Billion shares and the share price is $100.05 as of market opening on Oct. 3, this puts their valuation at 154.50 Billion dollars. Large cap stocks are simply a share of a large company with a market capitalization value of around 10 billion or above. Walt Disney would be considered a large-cap company and is part of the 30 companies which make up the Dow Jones Industrial Average. Other examples of Large-cap companies include Apple(AAPL), CVS Pharmacy(CVS), Amazon(AMZN), and Coca-Cola(KO). The advantage of owning large cap in your portfolio is that they are typically more stable and they offer dividends, which pay you a portion of your money back when the company earns a net profit. The disadvantage of large cap companies is that the return on investment is not as high as a smaller growth company because the growth is steady and the companies are well established.
Written by: ||lauren pearce, associate||