In the latest look at the underlying components of the S&P 500 ordered by largest market capitalization, Capital One Financial Corp (NYSE: COF) has taken over the #99 spot from PNC Financial Services Group (NYSE: PNC), according to The Online Investor. Click here to find out the top S&P 500 components ordered by average analyst rating »
Market capitalization is an important data point for investors to keep an eye on, for various reasons. The most basic reason is that it gives a true comparison of the value attributed by the stock market to a given company's stock. Many beginning investors look at one stock trading at $10 and another trading at $20 and mistakenly think the latter company is worth twice as much — that of course is a completely meaningless comparison without knowing how many shares of each company exist. But comparing market capitalization (factoring in those share counts) creates a true "apples-to-apples" comparison of the value of two stocks. In the case of Capital One Financial Corp (NYSE: COF), the market cap is now $44.18 billion, versus PNC Financial Services Group (NYSE: PNC) at $43.87 billion.
Click here to find out The 20 Largest U.S. Companies By Market Capitalization »
Below is a chart of Capital One Financial Corp versus PNC Financial Services Group plotting their respective size rank within the S&P 500 over time (COF plotted in blue; PNC plotted in green):
Below is a three month price history chart comparing the stock performance of COF vs. PNC:
Another reason market capitalization is important is where it places a company in terms of its size tier in relation to peers — much like the way a mid-size sedan is typically compared to other mid-size sedans (and not SUV's). This can have a direct impact on which mutual funds and ETFs are willing to own the stock. For instance, a mutual fund that is focused solely on Large Cap stocks may for example only be interested in those companies sized $10 billion or larger. Another illustrative example is the S&P MidCap index which essentially takes the S&P 500 index and "tosses out" the biggest 100 companies so as to focus solely on the 400 smaller "up-and-comers" (which in the right environment can outperform their larger rivals). So a company's market cap, especially in relation to other companies, carries great importance, and for this reason we at The Online Investor find value to putting together these rankings daily.
Special Offer: Try OLI Premium and get reports on Splits, Buybacks, and M&A daily
According to the ETF Finder at ETFChannel.com, COF and PNC collectively make up 4.65% of the iShares U.S. Preferred Stock ETF (PFF) which is higher by about 0.2% on the day Tuesday.
See what other ETFs contain both COF and PNC »
At the closing bell, COF is up about 2.9%, while PNC is up about 1.9% on the day Tuesday.
