There are various parameters to benchmark various companies on the stock exchange - some of the common metrics being share price, dividend payout, and price performance among many others.
But by far, market capitalisation, which denotes the valuation of the company, is the most used metric to compare the size of the company.
Such is the importance of market capitalisation that it is the basis of all benchmark indices across the globe – including the ASX200. At the Australian benchmark, a stock's weight in the index is determined by the float-adjusted market capitalisation of the stock. This is a function of current index shares, the latest available stock price and the Investable weight factor (IWF).
The top 20 companies in Australia, as on Monday’s trade end, were worth a whopping AU$1.28 trillion – roughly one-third the size of the Australian gross domestic product. Notably, of the top six companies on the ASX, four are banks. Let us now explore the list of top 10 Australian firms by market capitalisation:
- Commonwealth Bank Of Australia (ASX:CBA): Headquartered in Sydney, it is an Australian multinational bank with businesses across New Zealand, Asia, the United States and the United Kingdom. The bank’s scrip is on the verge of reclaiming the AU$100 mark, as it has rallied by a whopping 19.03% on year-to-date basis in 2021. The bank is worth AU$176 billion – making it the most valued Australian company.
- BHP Group Ltd (ASX:BHP): The Melbourne-based company is one of the mining behemoths across the globe. The business interests of the company include minerals exploration, production and processing (particularly coal, iron ore, copper and manganese ore) and hydrocarbon exploration, production and refining. The company’s share prices have surged at par with the big tech firms from Silicon Valley – rallying by 39.25% on a year-to-date basis. The company is worth AU$150 billion – the second largest in Australia.
- CSL Limited (ASX:CSL): This is the third and the last company in the coveted AU$100-billion club. It is an Australian multinational specialty biotechnology company which researches, develops, manufactures, and markets products to treat and prevent serious human medical conditions. Just like BHP Group, CSL Limited is also headquartered in Melbourne. Even as the company’s shares have dipped 2.58% on a year-to-date basis in 2021, it is still worth AU$127 billion.
- Westpac Banking Corp (ASX:WBC): This is Australia’s second largest bank, and headquartered in Sydney. Established in 1817 as the Bank of New South Wales, it acquired the Commercial Bank of Australia in 1982 before being renamed shortly afterwards. The bank’s shares have rallied 24.93% in the 2021 till now. The company is now worth little over AU$94 billion – and is about 6% shy of the AU$100 billion mark.
- National Australia Bank Ltd (ASX:NAB): One of the big four banks in Australia, it is the fifth most valued firm in the country. The Melbourne-headquartered bank was ranked among the top 25 banks in the world, measured by market capitalisation and top 100 banks in the world as measured by total assets in 2019. With its shares rallying 15.26% on a year-to-date basis in 2021, the bank is now worth AU$87 billion.
- Australia and New Zealand Banking Group Ltd (ASX:ANZ): It is yet another Melbourne-headquartered bank that has made it to the top 10 most valued companies in Australia. The bank was established almost 70 years ago, on 1 October 1951, when the Bank of Australasia merged with the Union Bank of Australia Limited. It is one of the big four Australian banks, along with the Commonwealth Bank, National Australia Bank (NAB) and Westpac. With its shares rallying 22.57% on a year-to-date basis in 2021, the bank is now worth AU$80 billion.
- Fortescue Metals Group Limited (ASX:FMG): It is the first company in this list that is not headquartered either in Sydney or Melbourne. Based in Perth, it is the fourth largest iron ore producer in the world after BHP, Rio Tinto, and Vale. Founded in 2003, the company’s shares have increased by a marginal 56 basis points in 2021. However, an eyepopping 249,300% surge since its foundation has placed Fotescue at the seventh slot in this list – worth AU$76 billion.
- Wesfarmers Ltd (ASX:WES): Yet another Perth-based company making it to top 10 list, Wesfarmers has interests predominantly in Australian and New Zealand, operating in retail, chemical, fertiliser, industrial and safety products. This more than a century old company has seen shares rally 13.86% on a year-to-date basis in 2021 and is worth AU$66 billion.
- Macquarie Group Ltd (ASX:MQG): This Sydney-headquartered company is an Australian multinational independent investment bank and financial services company. It is worth AU$57 billion and its shares have rallied 12.21% on a year-to-date basis in 2021.
- Woolworths Group Ltd (ASX:WOW): Headquartered 33 kilometres north-west of Sydney’s central business district, Woolworths has extensive retail interests throughout Australia and New Zealand. It is the largest company in Australia by revenue and the second largest in New Zealand. The shares of the company have now rallied 12.89% on a year-to-date basis, and the company is now worth AU$48 billion.