5 Ways Obama Is Right About Business 'Doing Fine'

By + More

1. Big Companies Are Highly Profitable

Next »

2 of 6

« Back

(Charlie Archambault for USN&WR)

Combined net income for firms listed in the S&P 500 stock index has risen by double-digits for the last three years, according to S&P Capital IQ. That has happened because big firms have slashed costs—partly through layoffs—while managing to raise revenue. Earnings growth has been leveling off, but it's still expected to grow at a healthy clip. Capital IQ expects earnings growth for big firms of about 7 percent per year in 2012 and 2013. Bank of America Merrill Lynch recently advised clients that "the US equity market remains strong relative to the rest of the world." And it said that "mega-caps"—the 100 biggest U.S. companies—are the strongest of all.

Next: 2. They Have Lots of Cash


You Might Also Like