What are the 11 Most Profitable Companies In The Fortune 500? Membership in the Fortune 500 is one of the most prestigious honors a company can have. Not only do most Fortune 500 companies have wide moats and strong competitive advantages but also many have dependable dividend payment histories. Many companies are the who’s who in terms of profitability, innovation, and corporate culture. A fair amount of companies are on the leading edge of technology, pioneering diverse fields such as artificial intelligence, virtual reality, and autonomous vehicles. Another group has paid dividends for over five decades and will likely continue to do so for the foreseeable future. Yet another group have done very well in terms of stock performance, powering much of the S&P 500’s gains over the last eight years.
In terms of selection criteria, the Fortune 500 ranks companies based on their total sales for the fiscal year. The list includes companies that are incorporated in the United States and that file financial statements with a U.S. government agency. In terms of ranking for this list, we define profits as net income after extraordinary charges, taxes, noncontrolling interests, but before preferred dividends.
Membership in the Fortune 500 is very diverse. Companies from various different sectors, including consumer staples, energy, financials, healthcare, telecommunications, and technology, all made the list in terms of who’s the most profitable. Many were also among the most profitable companies in 2016 in the world and among the largest companies in the world by assets. Without further ado, let’s take a look at the 11 Most Profitable Companies In The Fortune 500. In this list, we will specifically discuss, Johnson & Johnson (NYSE:JNJ), Bank of America Corp (NYSE:BAC), Apple Inc. (NASDAQ:AAPL), Exxon Mobil Corporation (NYSE:XOM), Citigroup Inc (NYSE:C), Verizon Communications Inc. (NYSE:VZ), Gilead Sciences, Inc. (NASDAQ:GILD), Wells Fargo & Co (NYSE:WFC), Berkshire Hathaway Inc. (NYSE:BRK.B), JPMorgan Chase & Co. (NYSE:JPM), and Alphabet Inc (NASDAQ:GOOG). For those of you interested, also check out the article, ‘10 Most Profitable Companies In The World in 2017 ‘.
#11 Johnson & Johnson (NYSE:JNJ)
Johnson & Johnson (NYSE:JNJ) reported profits up $15.4 billion for the last fiscal year, helping the consumer healthcare giant rank 11th on the list of 11 Most Profitable Companies In The Fortune 500. Although Johnson and Johnson’s sales slipped 5.7% year-over-year globally due to the strong dollar, many investors still consider JNJ a core dividend portfolio holding. Johnson and Johnson is one of the largest consumer staple companies in the world and its profits are relatively stable in the face of economic downturns, making it an ideal dividend investment.
#10 Bank of America Corp (NYSE:BAC)
Bank of America Corp (NYSE:BAC) raked in $15.88 billion in profits on sales of $93 billion for the latest fiscal year, marking a remarkable turnaround for a bank that few would touch with a ten foot pole during the financial crisis. Even better, the rising interest rates and internal cost cutting are expected by many to power Bank of America profits higher. Shares of the stock are up 3% year-to-date.
#9 Exxon Mobil Corporation (NYSE:XOM)
Although it is number two in revenue with sales of $246 billion, the low crude prices of recent years have hurt Exxon Mobil Corporation (NYSE:XOM)’s standing in terms of profits. The integrated oil company is number nine on our list of the most profitable Fortune 500 companies, reporting a profit of just over $16.15 billion. Traders will keep a close eye on Exxon Mobil in the coming weeks as OPEC decides whether it wants to extend its production cuts or not.
#8 Alphabet Inc (NASDAQ:GOOG)
Although it is investing in many ambitious world-changing projects that aren’t profitable yet, Alphabet Inc (NASDAQ:GOOG) keeps printing money. The internet conglomerate, led by Google and YouTube, made $16.34 billion for its last fiscal year, up 15.6% year-over-year. With the secular trend of cord cutting, YouTube will likely continue to grow while Alphabet’s driverless car efforts will hopefully start to make a difference in the bottom line over the coming years.
#7 Citigroup Inc (NYSE:C)
Big bank, Citigroup Inc (NYSE:C), reported profits of $17.24 billion for its last fiscal year, good for seventh place in terms of the most profitable companies in the Fortune 500. Shareholders aren’t complaining as the stock has rallied hard since November due to the Trump win, but still trade for just 0.76 times book value. Bulls hope deregulation and higher interest rates along with a potentially rebounding emerging market will help Citigroup continue to print profits well in the future.
#6 Verizon Communications Inc. (NYSE:VZ)
Verizon Communications Inc. (NYSE:VZ) is one part of the telecom duopoly in the United States, having reported net income of $17.88 billion for the last fiscal year. Given that the telecom sector is a mature industry and relatively saturated, Verizon has turned to M&A such as buying Yahoo’s core internet assets to diversify and increase growth. Shares of the stock yield almost 4.9% at current prices.
#5 Gilead Sciences, Inc. (NASDAQ:GILD)
Gilead Sciences, Inc. (NASDAQ:GILD) reported net income of $18.1 billion for its fiscal year, up almost 50% year-over-year. Sales rocketed up 31.1% year-over-year due in large part to the company’s Hep C franchise – Sovaldi and Harvoni. Despite trading for unde 9 times forward earnings estimates, shares are down 7% year-to-date as some traders worry about future competition.
#4 Wells Fargo & Co (NYSE:WFC)
Although its consumer division has taken a hit due to the past cross-selling scandal, Wells Fargo & Co (NYSE:WFC) is nevertheless number 4 in terms of the most profitable companies in the Fortune 500. Warren Buffett‘s favorite bank reported profits of $22.9 billion for its last fiscal year, down 0.7% year-over-year. Sales rose 1.9% over the same time frame to $90 billion.
#3 Berkshire Hathaway Inc. (NYSE:BRK.B)
Speaking of Buffett, the company the Oracle founded, Berkshire Hathaway Inc. (NYSE:BRK.B), raked in $24 billion in profits for its last fiscal year, good for number 3 on the list. Many bulls believe Berkshire is a great long term holding given Warren Buffett’s motto of investing in companies with wide moats and sustainable competitive advantages.
#2 JPMorgan Chase & Co. (NYSE:JPM)
Another major bank, JPMorgan Chase & Co. (NYSE:JPM) reported profits of $24.4 billion for the last fiscal year, up 12.3% year-over-year. The profit jump is a testament to CEO Jamie Dimon’s management skills as sales actually fell 1.1% over the same time frame to just over $101 billion. Bulls expect JPMorgan to do well in the long run as interest rates normalize.
#1 Apple Inc. (NASDAQ:AAPL)
Number one on the list by far in terms of profits is Apple Inc. (NASDAQ:AAPL), which reported net income of $53.4 billion for the last fiscal year, up 35.1% year-over-year. Sales jumped 27.9% over the same time frame to $233.7 billion. AAPL has rallied 23% year-to-date as traders position for the upcoming iPhone 8 launch and as sentiment has improved due to Warren Buffett’s Berkshire Hathaway having made a major investment over the past year.
In conclusion, the 11 Most Profitable Companies In The Fortune 500 includes many prestigious companies with wide moats and strong competitive advantages.