The 10 Biggest Cash Generators on the S&P 500

2. Pfizer Inc. (NYSE:PFE)

Market cap: $168 billion

Cash on hand: $23 billion

This is another highflier from the 1990s, one of the top performers of the heady decade. But unlike Microsoft, shares have begun recovering 47% in the past two years and hit a new five-year high in October. Pfizer is benefiting from growing demand for health care products and services with an industry-leading portfolio of generic and branded drugs. With a $186 billion market cap, this is no small company. But its low valuation suggests more upside, trading at just 10 times projected 2012 earnings of $2.16 per share, a solid discount to the industry average of 14 times. And when you add in a 3.5% dividend, this is a mega cap with tons of cash to support future dividend growth.

3. Chevron Corporation (NYSE:CVX)

Market cap: $215 billion

Cash on hand: $22 billion

Chevron is one of the largest energy companies in the world with multiplebusinesses and a market cap of $215 billion. Unlike smaller energy companies, Chevron has traded strongly in the past two years, with shares up 24%, handily beating the S&P 500’s 15% return in the same period. Chevron is an earnings and cash-flow machine, pushing its cash and marketable securities balance to $22 billion. With full-year earnings for 2012 expected to come in at $12.13 per share, this is another mega cap with value. Chevron’s dividend yield is another reward for investors looking for more stability.

Risks to Consider: Too much cash on the balance sheet can be a drag if companies underinvest in growth. Although cash hoarding in the past two years has lifted cash balances to record highs, this trend has been driven by economic uncertainty and fear of bad times ahead.

Action to Take –> These 10 stocks have the biggest cash balances in the S&P 500, providing them with additional stability for economic uncertainty. But longer term, those big cash balances present an opportunity for investors to capitalize on future growth, dividend increase and special dividends.

This article was originally written by Michael Vodicka, and posted on StreetAuthority.