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Tesla Set to Become a Top 10 Company in the S&P 500

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Tesla Set to Become a Top 10 Company in the S&P 500

Tesla s&p 500

The Briefing

  • With positive earnings in each of the last four quarters, Tesla is now eligible to join the S&P 500. They will be the 8th largest stock and 7th largest company on the benchmark index, with a market cap of $544 billion
  • Tesla’s inclusion in the S&P 500 will commence in December of this year—an additional blow to Tesla bears as the index brings with it an additional layer of prestige

The New Kid On The Block

Tesla will be joining the S&P 500 in December, gaining eligibility for inclusion after posting positive earnings over four consecutive quarters.

In Q3’20, the company made $331 million in profits, and delivered 139,300 vehicles. The stock has been on a tear in recent years, and joining the index only furthers the automaker’s momentum – dealing another blow to the increasingly hopeless short sellers along the way.

CompanyMarket CapTTM Earnings
Apple$1,971B$55B
Microsoft$1,617B$44B
Amazon$1,569B$11B
Alphabet$1,193B$34B
Facebook$785B$18B
Berkshire Hathaway$547B$81B
Tesla$544B$0.5B
Walmart$430B$14B
Visa$411B$10B
Johnson & Johnson$377B$34B

Anything But Standard

Standard & Poor’s have quite the criteria before a company can be considered for inclusion in their flagship index. To be part of the S&P 500, a minimum market cap of $8.2 billion is required.

Of course, market cap is not where Tesla’s weakness is. Valued at $544 billion, right off the bat they will be one of the top S&P 500 companies. Rather, net income has been the struggle for Tesla. After government subsidies, they posted $556 million in trailing twelve month (TTM) profits, placing them 357th in the index.

By market cap, Tesla runs with some of the all-time greats and will be the largest inclusion to join the index ever. When ranked by net income though, a much different ranking emerges:

RankCompanySymbolAnnual Net Income
355Tractor Supply CompanyTSCO$562M
356Mettler-Toledo InternationalMTD$561M
357TeslaTSLA$556M
358Huntington Ingalls IndustriesHII$549M
359Zebra TechnologiesZBRA$544M

By this metric, the automaker can be found adjacent to lesser-known Mettler-Toledo and Tractor Supply Company.

The EV Revolution

As the electric car movement continues full steam ahead, Tesla as the market leader will play a pivotal role in society’s transition towards it. The average cost of the Model 3 is decreasing, thus increasing its affordability. This marks a positive signal as widespread adoption often above all requires feasibility for the masses.

As governments worldwide continue to bolster their arsenal in combating climate change, it catalyzes the demand for both electric vehicles and Tesla shares. With short seller activity beginning to subside, Tesla’s official kickoff in the S&P 500 next month could be the next chapter for Elon Musk & Co.

Where does this data come from?

Source: Asset Dash and Barchart.com.
Notes: Financial data is as of November 25th, 2020

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Datastream

The U.S. Share of the Global Economy Over Time

As of 2019, the U.S. made up almost a quarter of the global economy. This chart shows how the U.S. Share of the global GDP has changed over time.

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us share of global gdp

The Briefing

  • The U.S. share of the global economy has nearly halved since 1960
  • America’s nominal GDP in current U.S. dollars is $21.4 trillion, or about 24% of the share of the global economy

The World’s Largest Economy

The U.S. is the world’s largest economy by nominal GDP, and its influence on the global economy is quite remarkable.

As of 2019, the U.S. made up almost a quarter of the global economy. But how has America’s share of the economic pie changed over time?

The U.S. Share of the Global Economy Over Time

While the U.S. economy has grown quickly over time, the global economy has grown quicker.

Since peaking at 40% in 1960, the U.S. share of the world economy has been cut almost in half, despite a rising national GDP and being the birthplace of some of the biggest companies on the planet.

YearGlobal GDPU.S. GDPU.S. Share of Global Economy
1960$1.37T$0.53T40%
1965$1.97T$0.74T38%
1970$2.96T$1.07T36%
1975$5.92T$1.69T28%
1980$11.23T$2.86T25%
1985$12.79T$4.34T34%
1990$22.63T$5.96T26%
1995$30.89T$7.64T25%
2000$33.62T$10.25T30%
2005$47.53T$13.04T28%
2010$66.13T$14.99T23%
2015$75.22T$18.23T24%
2019$87.80T$21.43T24%

The decline of America’s contribution to global GDP has been slow and uneven, with crests and troughs along the way.

Between 1965 and 1980, the country’s share fell by 13 percentage points, mainly due to stagflation of the 1970s. This decline was followed by Reaganomics and a period of strong recovery, which helped propel the U.S. share of the global economy back up to 34% by 1985.

The whipsawing would continue. Between 1985 and 1995, the U.S share fell by another 11 percentage points, only to bounce back to a local peak of 30% by the year 2000.

Downhill From Here?

Since the beginning of the 21st century, growth in many developing markets has continued at a rapid pace—and the U.S. share of the global economy has decreased as a result.

Until 2005, the U.S. still accounted for 28% of global GDP, but the Global Financial Crisis left a big dent, and its share fell to 23% by 2010. It has since remained relatively stable at 24%.

It’s important to put this decline into perspective. For instance, China’s share of the global economy grew from 4% in 1960 to 16.3% in 2019. Over that same time period, other countries like South Korea, Brazil, Mexico, Indonesia, and India also saw their emergence on the economic world stage, as well.

What the Future Holds

The COVID-19 pandemic has changed the course of the global economy, with most countries experiencing a recession in 2020. America’s economic position will depend on how quickly it can recover compared to the rest of the world.

Where does this data come from?

Source: The World Bank
Details: Data is in current U.S. dollars. Dollar figures for GDP are converted from domestic currencies using single year official exchange rates.

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America’s Most Responsible Companies in 2021

Which American companies are leading the way when it comes to corporate responsibility? Here’s a look at 2021’s most responsible companies.

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America's Most Responsible Corporations

The Briefing

  • Overall, HP was rated the most responsible American company in 2021
  • When it came to environmental initiatives, Waters took the top spot. The biotech company has committed to reducing its emissions by 35% from its 2016 levels
  • General Motors received the top score in social responsibility—it’s the only major U.S. company with both a female CEO and CFO
  • In the corporate governance category, Qualcomm placed first. The company runs a number of education programs to help engage women and minorities in STEM related-fields

America’s Most Responsible Companies in 2021

Consumers are becoming increasingly more thoughtful about the brands they support and buy from. In the U.S. and UK, 68% of online consumers would or might stop buying from a brand with weak corporate responsibility practices.

Because of this, companies need to ensure their corporate social responsibility (CSR) initiatives are up to snuff in order to be competitive.

With this in mind, here’s a look at the top 20 most responsible companies in America, and what they’ve been doing to give back to their communities.

The Top 20 Most Responsible Companies

Newsweek and Statista used a four-step methodology to identify America’s most responsible companies. The process included a pre-screening, as well as in-depth CSR document review, and a consumer survey.

From there, companies were given a score out of 100 and ranked accordingly. With a score of 93.2, HP placed first as America’s most responsible company:

RankCompanyOverall Score (out of 100)
1HP93.2
2NVIDIA92.7
3Microsoft91.9
4Cisco Systems91.7
5Qualcomm91.5
6General Mills91.3
7Whirlpool91.3
8Illumina90.9
9Citigroup89.5
10Dell Technologies89.4
11Lam Research88.8
12General Motors88.7
13American Express88.5
14Nielsen88.4
15Mettler-Toledo International88.3
16MetLife88.2
17Merck & Co88.1
18International Flavors & Fragrances88.0
19Waters87.7
20Intel87.4

In its 2019 Sustainable Impact Report, HP outlined how it’s been working to drive sustainability in three key areas—the planet, people, and community. And the company has made some impressive progress. For instance, in 2019 it used over 1 million pounds of ocean-bound plastic in its products.

It’s not a huge surprise that HP has taken the top spot on the list. The company is known for its innovation and progressive practices. In 2020, it was recognized as one of the top 20 most innovative organizations of the year.

Corporate Responsibility in a COVID World

The world’s continual struggle with COVID-19 has put an even larger emphasis on CSR, and the importance of supporting the community at large.

It’s no longer just the right thing to do. As consumer demand for transparency and corporate responsibility escalates, CSR practices are transitioning from a nice-to-have to a need-to-have. And organizations need to get on board before they’re left behind.

Where does this data come from?

Source: Newsweek and Statista
Notes: For more information on methodology, click here

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