Categories of Companies
What are Large-Cap Companies?
Large-cap companies are well-established and have a market capitalization of more than $10 billion. They typically have a history of stable earnings and a strong market presence.
Some characteristics
- Strong balance sheets
- Dividend Paying
- Brand Recognition
- Stable and predictable earnings
Why invest in large-cap?
It’s ideal for investors seeking stable and consistent returns with low risk. These companies are good for starting your investment journey. The stable gains will build your trust in investing and develop your interest in learning more about the stock market.
What are Mid Cap Companies?
Mid Cap Companies are established companies with a proven track record of revenue and earnings growth and have a market capitalization between $2 billion and $10 billion.
Some characteristics
- Higher growth potential
- Potential for acquisition
- More volatile than large caps.
- Moderate risk
- Been in business for several years
Why invest in mid-cap?
Ideal for investors who are looking for growth businesses and bet on the future. These companies require more due diligence on the investor’s side. Not recommended for new investors.
What are Small Cap Companies?
A small-cap company, that has underlying potential to grow with market cap typically ranging from $300 million to $2 billion. These companies are generally considered to be riskier investments compared to large-cap companies because they tend to have less established track records, lower liquidity, and can be more susceptible to market volatility.
Some characteristics
- Extremely Volatile
- Very Risky
- Small revenue
- High growth potential
- Companies are often led by founders
Why invest in a small cap?
It’s ideal for investors with high-risk appetites. The goal here is high growth. Small-cap stocks can be fertile ground for multi-bagger opportunities because they often have greater growth potential than more established businesses. Not recommended for new and passive investors.
Most people lose money in the small caps by following the trends.
CATEGORY
Large Cap
Mid Cap
Small Cap
Valuation
More than $10bn
$2bn – $10bn
$300 mn – $2 bn
Risk
Low-Risk
Moderate-Risk
High-Risk
Example
Apple, Microsoft
Etsy, Peloton
CarParts.com
Note: These valuation numbers mentioned above are very old. In today’s scenario, there are now startups with valuations of more than $10 billion, which may not necessarily qualify as large-cap businesses based on other factors such as market share and stability. I would suggest focusing more on characteristics rather than market capitalization. These valuation numbers do not mean anything in current market conditions.
What are Large-Cap Companies?
Large-cap companies are well-established and have a market capitalization of more than $10 billion. They typically have a history of stable earnings and a strong market presence.
Some characteristics
- Strong balance sheets
- Dividend Paying
- Brand Recognition
- Stable and predictable earnings
Why invest in large-cap?
It’s ideal for investors seeking stable and consistent returns with low risk. These companies are good for starting your investment journey. The stable gains will build your trust in investing and develop your interest in learning more about the stock market.
What are Mid Cap Companies?
Mid Cap Companies are established companies with a proven track record of revenue and earnings growth and have a market capitalization between $2 billion and $10 billion.
Some characteristics
- Higher growth potential
- Potential for acquisition
- More volatile than large caps.
- Moderate risk
- Been in business for several years
Why invest in mid-cap?
Ideal for investors who are looking for growth businesses and bet on the future. These companies require more due diligence on the investor’s side. Not recommended for new investors.
What are Small Cap Companies?
A small-cap company, that has underlying potential to grow with market cap typically ranging from $300 million to $2 billion. These companies are generally considered to be riskier investments compared to large-cap companies because they tend to have less established track records, lower liquidity, and can be more susceptible to market volatility.
Some characteristics
- Extremely Volatile
- Very Risky
- Small revenue
- High growth potential
- Companies are often led by founders
Why invest in a small cap?
It’s ideal for investors with high-risk appetites. The goal here is high growth. Small-cap stocks can be fertile ground for multi-bagger opportunities because they often have greater growth potential than more established businesses. Not recommended for new and passive investors.
Most people lose money in the small caps by following the trends.
| CATEGORY | Large Cap | Mid Cap | Small Cap |
| Valuation | More than $10bn |
$2bn – $10bn |
$300 mn – $2 bn |
|
Risk |
Low-Risk |
Moderate-Risk |
High-Risk |
|
Example |
Apple, Microsoft |
Etsy, Peloton |
CarParts.com |
Note: These valuation numbers mentioned above are very old. In today’s scenario, there are now startups with valuations of more than $10 billion, which may not necessarily qualify as large-cap businesses based on other factors such as market share and stability. I would suggest focusing more on characteristics rather than market capitalization. These valuation numbers do not mean anything in current market conditions.