What Is the Fortune 1000?
The Fortune 1000 is an annual list of the 1000 largest American companies maintained by the popular magazine Fortune. Fortune ranks the eligible companies by revenue generated from core operations, discounted operations, and consolidated subsidiaries. Since revenue is the basis for inclusion, every company is authorized to operate in the United States and files a 10-K or comparable financial statement with a government agency.
The list does not contain private organizations as they generally withhold information from the public. Other companies excluded from the list include those that fail to report full financial statements for at least three quarters in the current fiscal year.
- Published by Fortune magazine, the Fortune 1000 is a list of the largest US incorporated companies and companies authorized to conduct business in the US, by revenue.
- The Fortune 1000 list is quite a good indicator of the current state of the business sector.
- Excluded from the rankings are private companies and companies that do not fully report their financial positions for at least three quarters in the current fiscal year.
- Rankings are based on revenues generated from core operations, discounted operations, and consolidated subsidiaries.
- The Fortune 500 list overshadows the Fortune 1000 list in part because of the near-constant change of lower-level companies on the 1000 list.
Understanding the Fortune 1000
The Fortune 1000 is still considered an important and prestigious list despite receiving considerably less notoriety than the more selective Fortune 500 rankings. The annual list draws significant interest from readers who follow the business sector and seek to learn about the influential leaders in the US economy.
Notably, Walmart (WMT) has topped the list for eight of the past 10 years, unseated only by ExxonMobil (XOM) in 2009 and 2012 when oil prices reached near term highs.
Many investors view a fall in rank or failure to make the list as a sign of weakness for a company or an industry, whereas a move higher portends strength. Since revenue dictates this list, many of the companies at the top offer products that serve most people. Some of the products can include groceries and clothing found at Walmart, gas to fuel a vehicle from an ExxonMobil station, or the widely owned iPhone produced by Apple (AAPL). For this reason, many business-to-business (B2B) software companies are unable to crack the upper echelons of the list.
California has the highest number (118) of Fortune 1000 companies among all states, and New York City has the highest number (74) of all US cities as of 2018.
Top Members of the Fortune 1000
Fortune magazine compiles a list of 1,000 companies with the highest revenues in the United States. The companies on this list make up more than 2/3 of the nation's economy and have combined total revenues of $15 trillion.
Ranked number 1 for the seventh consecutive year, Walmart (WMT) reported $572billion in revenues and $13.7 billion in profits for 2021. Walmart also ranked high on the e-commerce sales list, although not as high as Amazon (AMZN)—Fortune's number 2 pick.
Amazon's total revenues for 2021 were $470billion—a 21.7% increase from 2020—and profits were $33.4billion. An increase in consumer bundles contributed to this marked growth, as well as increases in Amazon Prime and entertainment subscriptions, which cater to more than 150 million customers worldwide.
Apple was third on the list with 2021 revenues of $365.8 billion and a net profit of $94.8 billion.
In addition to being ranked number 1 for highest revenues, Walmart is also number 1 on Fortune's list as the most profitable company.
How to Invest in the Fortune 1000
Curious about how to invest in the nation's top revenue earners? Unless you're Warren Buffet, you may not be able to invest in each company individually. However, even with sufficient resources, investing in them one-by-one may not be wise or practical.
Fortunately, an index fund may be a viable option. For example, the S&P 500 is an index fund that tracks the performance of the United State's 500 largest companies. It is likely that all companies in this index are on the Fortune 1000 list. However, it might ignore the bottom 500 companies on the Fortune 1000 list.
Covering a wider range of companies, the Russell 1000 index tracks the top stocks of the Russell 3000. It focuses on the market capitalization of the top 1000 companies in the U.S. For investors wanting to invest in as many Fortune 1000 companies as possible, this index might be the better option because of the number of stocks included.
Criticism of the Fortune 1000
The Fortune 1000 list offers a valuable gauge of the current state of the business sector. Yet, the Fortune 500, which measures just the top 50% of such companies by revenue greatly overshadows this list. In many ways, the rapid turnover of companies listed near the bottom of the Fortune 1000 limits it from gaining the same mainstream acceptance as the smaller Fortune 500 list.
For many years, researchers equated turnover as a proxy for positive economic churn and underlying strength in innovation and productivity. However, high churn isn't always a signal of strong business growth; instead, it can mean an active merger and acquisition (M&A) environment, where large corporations purchase small companies.
What Is the Difference Between the Fortune 500 and Fortune 1000?
The Fortune 1000 is a list of the top revenue-generating companies for the previous year. The Fortune 500 is a subset of the Fortune 1000 that comprises the largest 500 companies therein. The Fortune 100 is an even more elite subset, with the largest 100 revenue-generating companies.
What Are thew Top 10 Companies on the Fortune 1000 List?
For the 2022 Fortune 1000 list, the top 10 companies were:
- CVS Health
- United Healthcare
- Exxon Mobil
- Berkshire Hathaway
- Alphabet (Google)
When Did the Fortune Lists Begin?
In 1955, Fortune magazine first established the Fortune 500 list. At the time, General Motors ranked at the top of the list with revenues in excess of $9.8 billion. This was a position that it continued to hold for the next three decades. Along with General Motors, many of the largest companies by revenue in 1955 are names that still exist today—including Chrysler, Exxon, and General Electric.