Apple Value Now Larger Than Combined GE, Wal-Mart, GM, McDonald's
Apple Inc. (NASDAQ: AAPL) has been all over the news for being the first company to close above a $700 billion market cap. That blows out the likes of the mega-valuations of the tech bubble at the height of the Nasdaq in 2000 by far. Still, having a $710 billion market cap needs to be put in perspective, above beyond simply being massive.
24/7 Wall St. has looked at some of the top companies in America, and it turns out that Apple’s market cap is now larger than General Electric, Wal-Mart, General Motors and McDonald’s combined. If you add up the market caps of these four behemoths, you still have $30 billion left over, when comparing them to Apple.
This means that the premiere consumer electronics company in the world is now worth more than the largest U.S. conglomerate, the world’s largest retailer, the largest U.S. auto giant (by revenue) and the world’s largest daily seller of food combined. Three of these four giants are Dow Jones Industrial Average components, and GM used to be.
To put this in perspective, in the following we are keeping the data mostly confined to the most recent fiscal year. We have included some references to forward expectations as well. All figures are in billions and have been rounded up or down.
Apple’s most recent fiscal year ended in September, and Apple had $182.8 billion in revenue, with $52.5 billion in operating income and $39.5 billion in net income. Apple’s most recent rise can be attributed almost 100% to the new iPhone launch. The Apple Watch is coming soon, and Apple has made a large move to solar, but it may be a niche product compared to the iPhone. Apple’s dividend yield is close to 1.6%. So, how does that compare to the revenue, income, dividend and developments elsewhere for GE, Wal-Mart, GM and McDonald’s? We have looked at these individually and on a combined basis for a reference.
General Electric Co. (NYSE: GE) has a $248 billion market cap. Its 2014 annual revenue was $148.6 billion, with operating income of $17.2 billion and net income of $15.2 billion. GE raised its dividend in December, and the current new yield is 3.8%. GE is in the process of spinning off the Synchrony unit, and it is becoming more of an industrial conglomerate — but it is dogged by the recent tank in oil prices.
Wal-Mart Stores Inc. (NYSE: WMT) has a market cap of $281 billion. The world’s largest retailer has a January year-end, so the data are now a year old. Still, it doesn’t change that much. Wal-Mart’s revenues from last year were $476.3 billion, with operating income of $26.9 billion and net income of $16.0 billion. Wal-Mart recently has seen new highs and may have started to get a focus from investors again. Its yield is closer to about 2.2%.
General Motors Co. (NYSE: GM) has a market cap of $60 billion, and 2014 revenue was $156.0 billion. Operating income was $1.7 billion, while net income was $4.0 billion. GM is in the midst of a serious growth cycle, and operating income is expected to normalize ahead. Things are going well enough that it recently raised the dividend, to almost a 4% yield.
McDonald’s Corp. (NYSE: MCD) had a market cap of more than $91 billion. The Golden Arches had $27.4 billion in revenues in 2014, with operating income of $7.9 billion and net income of $4.8 billion. McDonald’s shares have been stuck in the mud for over a year now, but it has a new CEO to lead the company. Also, its yield is now close to 3.6%.
So, now let’s add all these up and see how Apple compares on a net basis to the combined numbers for Wal-Mart, GE, GM and McDonald’s.
- Apple’s $182.8 billion in revenue vs. $808 billion for the other four giants
- Apple’s $52.5 billion in operating income vs. $53.7 billion for the other four giants
- Apple’s $39.5 billion in net income vs. $40 billion for the other four giants
The long and short of the matter is that comparing Apple to the combined values of GE, Wal-Mart, McDonald’s and GM may sound crazy. It sounds crazy in terms of combined revenue as well. Once you get into operating income and net income, though, it suddenly doesn’t look so crazy. Now consider that Apple’s growth for fiscal 2015 is expected to be about 30% in earnings per share and about 23% for revenues.
Here is another comparison for you: versus the nations with the highest gross domestic product (GDP) in the world. We used the CIA World Factbook for GDP in 2013, and Apple’s market cap of $710 billion would put it behind Saudi Arabia’s (#19) $748 billion, but above Switzerland (#20) at $685 billion. It does not seem fair to compare GDP to market cap, but it is just one more reference.
To put Apple in perspective for valuation on a per capita basis, Apple’s $710 billion market cap is the equivalent of more than $2,200 per person in the United States. It is also worth almost $100 per person in the entire world.
Food for thought.