Colorado Top 50 companies heavy in manufacturing, energy, light on information, software

The 47 largest Colorado-based companies are heavy in manufacturing and services sectors compared with the S&P 500, according to data on Morningstar.com. These stocks are among the 50-largest publicly-owned companies based in Colorado. Three of the Top 50 companies have been or are being acquired and no longer are or will be Colorado-based.

A total of 46.63% of the 47 largest companies are in the manufacturing sector, compared with 38.51% of the S&P 500. Manufacturing includes 9.56% of the 47 that are in consumer goods, compared with 9.10% in the S&P 500; industrial materials, 10.86% vs. 12.93%; energy, 26.22% vs. 12.94% and no utilities, compared with 3.54%.

Service sector companies account for 43.04% of the top 47, compared with 40.62% in the S&P; healthcare, 5.07% vs. 11.98%; consumer services, 17.63% vs.  6.84%; business services, 6.8% vs. 4.37%; financial services, 13.54% vs. 17.43%.

Information sector companies account for 10.33% of the 47 companies, compared with 20.87% for the S&P 500; software, 0.86% vs. 4.14%; hardware, 0.28% vs. 10.20%; media, 7.3% vs. 2.9%; and telecommunications, 1.9% vs. 3.63%.

Another way to look at the top 47 is by type of stock, according to Morningstar.com. Of the Colorado-based companies, 40.51% are hard asset companies, compared with 14% for the S&P 500, and 1.3% are distressed, compared with 0.58% of the S&P 500. And 18.97% of the stocks are aggressive growth stocks, compared with 14.11% in the S&P 500.

Perhaps the best news for Colorado in a slowing economy is that only 3.8% of the companies based here are cyclical, compared with 18.8% of companies in the S&P 500, according to Morningstar.com’s data.

The 47 companies’ average price earnings ratio based on predicted earnings, which often are inflated this time of year, is 16.1, or 1.12 times the same PEs for the S&P 500. Colorado, of course, is home to a lot of hot energy and gold mining companies, which have been hot in the stock market for years now.

But because so many Colorado-based companies are hard asset businesses, their capital costs are high, and their returns on assets average only 4.09% or only 48% of the returns of S&P 500 companies. Similarly, the average return on equity for the 47 stocks is 9.34%, or 42% of the average for the big S&P 500 companies.

Full disclosure: I have no interest in Morningstar.com. I’m just a subscriber who finds the site and its data useful.

For educational purposes only. Investigate before you speculate.

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