2016 was a fairly tumultuous year (and aren’t they all): Brexit, a new political climate in the USA, effectively leading to the end of the Trans Pacific Partnership, continuing warfare in Syria and Ukraine, and political upheaval in several of the world’s largest second-tier economies. Yet, even against this backdrop, certain blue-chip companies continue to thrive and make money for their investors. Let’s take a look at the top ten performers:
Not least because low oil prices have presented challenges to petroleum companies, Apple retains the top spot from last year. This is also the first fiscal year since 2001 that the company’s revenue is lower than the previous year – $216bn versus $234bn in 2015. Although iPhone and Mac sales were disappointing, some of the slack was offset by increases in software and service earnings.
#2: JP Morgan Chase & Co
The biggest bank in America since 2011, it was also the most profitable in 2016. A year-on-year growth in profit of no less than 12% was made possible by solid revenue from retail banking activities, but also by sustained growth on the investment side of the business.
#3: Berkshire Hathaway
You might be forgiven for not remembering that this was once a textile manufacturing concern: Warren Buffet’s flagship vehicle made significant gains on the back of strong performances of businesses in sectors such as manufacturing, food sales, insurance and the BNSF railroad.
#4: Wells Fargo
Profits remain steady for this financial giant, although growth figures did not quite match what some analysts were expecting. The completion of the company’s acquisition of GE Capital’s commercial distribution finance business in 2016 points to better numbers in 2017.
#5: Gilead Sciences
This company leads the way in the pharmaceutical industry in terms of making profits, but its high margins have caused it to attract a certain amount of controversy. Two thirds of its revenue, some $20bn, are derived from medicines used to combat hepatitis C, and politicians have accused the company of overpricing these at the expense of sufferers.
#6: Verizon Communications
Operating in a highly competitive market punctuated by frequent technological changes, Verizon continues to perform well. Its success can be ascribed to an expanding customer base, effective marketing and consumer uptake of services ranging from wired access to mobile video.
Having trimmed staff and underperforming business units in 2015, this banking corporation was placed under pressure last year by a combination of low energy prices, low interest rates and uncertainty about the long-term direction world events might take.
The quintessential internet company continues to perform strongly in its key operational areas: online ad placement, mobile search and the YouTube service.
#9: Exxon Mobil
Due to continued uncertainty about what the oil price might be in a year’s time, this energy company has been pursuing a policy of aggressive restructuring, selling off peripheral assets, strictly limiting exploration and new capital spending, and focusing on efficiency in its operations.
#10: Bank of America
BoA seems to be finally shedding its legal troubles, including the legal fees and heavy fines that went with these, while earnings are improving. The banking sector in general is experiencing a boost after the Trump election, and the bank is currently in the process of buying back $1.8bn of its own shares.