Last Updated on May 24, 2022 by
Stock market investors, especially beginners, are often overwhelmed by the sea of investment options available to them. Confusions about which stocks to invest in our natural and often baffles even seasoned investors. Thus, depending on your investment strategy, it is pertinent to have adequate knowledge of the stocks you choose to invest in. The share market is inherently risky, and you can never be too cautious of where you are investing money.
One of the bases for classifying stocks is their market capitalisation or market cap. Consequently, stocks classify as large-cap, mid-cap, and small-cap. Knowing what each category of stocks means can help you make wise investment decisions.
This article will walk you through what large-cap stocks are and how you can discover them using Tickertape’s stock screener.
Table of Contents
What is market capitalisation?
Market capitalisation or market cap is a company’s aggregate market value. It is based on the total number of outstanding shares of the company and the current market price of its shares. You can calculate the market cap by multiplying the current price of each share by the company’s total number of outstanding shares. In other words, the market cap is an estimate of a company’s valuation and helps investors compare the size of companies.
Market capitalisation = Total number of outstanding shares X Current market price
What are large-cap stocks?
Large-cap stocks are the shares issued by a company with a high market capitalisation, usually above Rs. 20,000 cr. Some stocks in the large market cap category are also called blue-chip stocks. Such stocks belong to blue-chip companies, who are usually the leaders in their respective industry domains. Blue-chip companies in India include the likes of Reliance Industries Ltd., Hindustan Unilever, HDFC Bank, TCS, Infosys, and others.
Thus, large-cap stocks typically belong to financially sound companies with prominent market recognition. Globally recognized stock exchange indices list large-cap stocks on the top. In India, Nifty 50 refers to the 50 most popular large-cap stocks with high trading volumes.
Features of large-cap stocks
- Large-cap stocks are low-risk investments.
- They have solid financial standing and are resilient to market volatility.
- Large-cap companies are financially mature, bellwether companies in their respective industries.
- The ready availability of buyers and popularity make large-cap stocks one of the most liquid investment options.
Pros and cons of investing in large-cap stocks
Large-cap stocks have both benefits and drawbacks. Here’s a look:
Pros
Large-cap stocks are stable compared to mid-cap or small-cap stocks, making them ideal for risk-averse long-term investors. They typically offer consistent dividend payouts, perfect for balancing your investment portfolio. There is greater transparency when it comes to the availability of information on the performance of large-cap companies.
Cons
Due to their feeble response to market fluctuations, large-cap stocks have limited capital appreciation prospects. So, unlike mid-size companies or startups, large-cap companies do not have high growth potential. Investments in large-cap stocks are expensive. Thus, investors with low disposable income cannot afford to put money into these stocks.
Investing in cash-rich large-cap stocks
Large-cap stocks are your best bet if you are looking for long-term investing, want to add stability to your investment portfolio and ensure steady dividend incomes. But how do you find cash-rich large-cap stocks? Well, the easiest option is to use Tickertape’s online stock screener. It lets you apply the relevant filters and customize your search. The process of discovering large-cap stocks on tickertape’s online stock screener is quick, hassle-free, and accurate.
How to use Tickertape’s stock screener to discover large-cap stocks?
You need a smartphone or computer and an active internet connection to find the best large-cap stocks on Tickertape’s online stock screener. The following pointers describe the process:
- If you are using a computer or a mobile, visit Tickertape’s online stock screener from your browser.
- Click on the top left downward arrow next to the Tickertape icon. Choose ‘Stock Screener’ from the drop-down menu.
- Under the ‘Basic’ screener options, scroll down to ‘Cash Rich Largecaps’ and click on ‘Load.’ The screener applies the following filters to display the top cash-rich large-cap stocks that you see on your screen.
- 1Y Hist Op. Cash Flow Growth (>0.00)
- 1Y Historical EPS Growth (>10.00)
- Earnings Per Share (>0.00)
- Net Change in Cash (>0.00)
- Operating Cash Flow (>0.00)
Note: If you are using a browser, you have to apply the above filters manually.
- You can now compare cash rich large-cap stocks on the list and choose those stocks that align with your investment strategy.
You can customize your search for cash-rich large-cap stocks as well. Read further to know-how.
You can apply other parameters or create custom filters to fine-tune the list of cash-rich large-cap stocks. The steps to customize your search are as follows:
- If you are using a browser, simply click on ‘+Add Filter’ in the filter panel on the left-hand side of the screen.
- You will get over 200 filters to choose from and customise your search. Some of the standard filters include:
- Profitability
- Price and Volume
- Financial Ratios
- Growth
- Valuation
- Ownership
- Analyst Ratings
- Futures and Options
- Technical Indicators
- Income Statement
- Balance Sheet and Cash Flow
- ETFs
- Tickertape Special
Conclusion
Large-cap stocks are popular with investors due to their stability and regular dividend payouts. However, these stocks have a low capital appreciation and are not for investors with a high-risk appetite and an objective of high returns. Moreover, large-cap stocks are expensive and practically unaffordable for investors with low disposable income.
You can do your research for cash-rich large-cap stocks with Tickertape’s online stock screener. Discovering stocks on Tickertape is simple, quick, convenient. Go ahead and build yourself a robust portfolio with Tickertape!
