U.S. stock industry sectors : The U.S. stock market is the world’s largest and most liquid financial investment market, attracting investors from all over the world, including both investors and a large number of speculators.
Before entering the U.S. stock market, understanding the industries in which stocks are distributed in the U.S. stock market can help investors better conduct stock analysis, such as the individual situation of the company issuing the stock, its performance in the industry to which it belongs, etc., or help investors determine investment goals based on the market trends of different sectors.
So, what sectors are included in the U.S. stock market? What industries do they correspond to? After reading this article, you will understand all 11 sectors included in the U.S. stock market, the industries they include, and common stocks and ETF products.
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What is GICS?
GICS , the full name of which is Global Industry Classification Standard, was jointly developed by Morgan Stanley Capital International (MSCI) and Standard & Poor’s (SP) in 1999.
GICS is a classification method that defines the attributes of different companies based on their operating businesses. Under this standard, GICS divides companies into sectors, industry groups, industries and sub-industries, thereby systematically identifying the operating attributes of each company and assigning each company a sub-industry-level GICS code.
In the field of financial investment, GICS is the classification standard used by many investors, analysts and economists when measuring and analyzing different companies. By comparing companies in the same group through this standard, a more accurate picture of company operations can be obtained.
At the same time, investors can also use GICS to overview the market trends of different sectors or industry groups, so as to build a diversified investment portfolio that better suits them.
Different companies will be included or excluded in the calculation process of certain specific financial indices based on their own GICS codes, thereby affecting the index changes of specific sectors or industries and providing guiding data for market investment.
Since its creation, GICS has been adjusted according to the continuous changes in the market. For example, in 2016, the real estate sector was added, and in 2018, the then Telecommunications Sector was changed to the Communication Services Sector. Currently, there are more than 26,000 stocks in the world that use GICS for classification, accounting for more than 95% of the total market value of listed companies worldwide. In the US stock market, there are 11 sectors, 24 industry groups, 69 industries and 158 sub-industries.
The 11 sections include:
- Information Technology
- Financial Services
- Healthcare
- Consumer Discretionary
- Industries
- Communication Services
- Consumer Staples
- Energy
- Real Estate
- Materials
- Utilities
1.Information Technology
The information technology sector mainly covers different categories of technology innovation companies, mainly including three categories: software (49%), hardware (30%), and semiconductors (21%).
Note : The above ratio uses the total market value of the companies in each category.
The GICS code for the information technology sector is 45 .
More subdivided company categories include: companies that focus on designing software, providing software technology solutions, computer hardware, hardware technical support, and manufacturing and sales of equipment and components that may be involved in installation and later use. It also includes the semiconductor industry, including semiconductor manufacturers and companies used to produce semiconductor chip equipment.
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $13.23T |
| Market Weight | 27.23% |
| Price-to-earnings ratio (GAAP actual last year) | 29.42 |
| P/E (Current Valuation) | 29.46 |
| Corporate Value | $959.32 B |
| Earnings per share (EPS TTM) | $6.03 |
| EPS Growth (TTM vs. Prior TTM) | 30.58% |
| Revenue Growth (TTM vs. Prior TTM) | 35.11% |
| Return on Equity (TTM) | -14.91% |
| Return on Investment (TTM) | 24.02% |
| Total Debt/Equity (TTM) | -13.06 |
| Dividend Yield (TTM) | 1.22% |
Data source: Fidelity
Industries covered by information technology
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
|---|---|---|
| Software & ServicesSoftware and Services4510 | IT ServicesIT Services451020 | IT Consulting & Other ServicesIT consulting and other services45102010 |
| Data Processing & Outsourced ServicesData processing and outsourcing services45102020 | ||
| Internet Services & InfrastructureInternet services and infrastructure45102030 | ||
| Softwaresoftware451030 | Application SoftwareApplication Software45103010 | |
| Systems SoftwareSystem Software45103020 | ||
| Technology Hardware & EquipmentTechnical hardware and equipment4520 | Communications EquipmentCommunications equipment452010 | Communications EquipmentCommunications equipment45201020 |
| Technology Hardware, Storage & PeripheralsTechnology Hardware, Storage and Peripherals452020 | Technology Hardware, Storage & PeripheralsTechnology Hardware, Storage and Peripherals45202030 | |
| Electronic Equipment, Instruments & ComponentsElectronic equipment, instruments and components452030 | Electronic Equipment & InstrumentsElectronic equipment and instruments45203010 | |
| Electronic ComponentsElectronic components45203015 | ||
| Electronic Manufacturing ServicesElectronic Manufacturing Services45203020 | ||
| Technology DistributorsTechnology Distributor45203030 | ||
| Semiconductors & Semiconductor EquipmentSemiconductors and Semiconductor Equipment4530 | Semiconductors & Semiconductor EquipmentSemiconductors and Semiconductor Equipment453010 | Semiconductor EquipmentSemiconductor Equipment45301010 |
| Semiconductorssemiconductor45301020 |
Characteristics of the information technology industry
The information technology sector currently accounts for 27.23% of the entire market , and there are currently 471 stocks in this sector.
Advantages of this sector
- With the promotion of the fifth-generation (5G) cellular network and the increasing trend of localization, it can help improve the fundamental market conditions;
- The balance sheet and earnings growth potential are generally strong;
- Financing costs are generally low;
- As the demand for financial services technology and online retail business continues to increase, the demand for infrastructure and software will continue to increase;
- When companies increase productivity through technological investments, they have a higher likelihood of achieving long-term growth.
Disadvantages of this sector
- The valuation of this sector is overvalued in the investment history;
- Currently, the global inventory of semiconductors is limited, and there is a situation of supply exceeding demand;
- Funds in this sector are highly concentrated in a few stocks;
- Antitrust litigation between the United States and Europe could have dramatic consequences.
Common stocks and ETFs in the industry
- Apple (AAPL)
- Microsoft (MSFT)
- Amazon (AMZN)
- Vanguard Information Technology ETF (VGT)
- Fidelity MSCI Information Technology ETF (FTEC)
- SPDR Morgan Stanley Technology ETF (MTK)
- SPDR S&P Semiconductor ETF (XSD)
2.Financial Services
The financial services sector mainly includes companies involved in currency processing, the most important category being the banking industry, but also includes some financial sectors such as insurance companies, brokerage firms, financial product providers, and mortgage-related real estate investment trusts. Generally speaking, changes in international interest rates and the Fed’s policies will have a more significant impact on the performance of the financial services sector.
The GICS code for the Financial Services sector is: 40
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $7.89 T |
| Market Weight | 10.96% |
| Price-to-earnings ratio (GAAP actual last year) | 9.83 |
| P/E (this year’s valuation) | 11.82 |
| Corporate Value | $133.74 B |
| EPS (TTM) | $11.30 |
| EPS Growth (TTM vs. Prior TTM) | 52.23% |
| Revenue Growth (TTM vs. Prior TTM) | 9.52% |
| Return on Equity (TTM) | 15.99% |
| Return on Investment (TTM) | 8.33% |
| Total Debt/Equity (TTM) | 147.79 |
| Dividend Yield (TTM) | 3.26% |
Data source: Fidelity
Industries covered by financial services
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Banksbank4010 | Banksbank401010 | Diversified BanksDiversified Bank40101010 |
| Regional BanksRegional Banks40101015 | ||
| Thrifts & Mortgage FinanceSavings and mortgages401020 | Thrifts & Mortgage FinanceSavings and mortgages40102010 | |
| Diversified FinancialsDiversified Finance4020 | Diversified Financial ServicesDiversified financial services402010 | Other Diversified Financial ServicesOther diversified financial services40201020 |
| Multi-Sector HoldingsMulti-sector holding40201030 | ||
| Specialized FinanceProfessional Finance40201040 | ||
| Consumer FinanceConsumer Finance402020 | Consumer FinanceConsumer Finance40202010 | |
| Capital MarketsCapital Markets402030 | Asset Management & Custody BanksAsset Management and Custody Banks40203010 | |
| Investment Banking & BrokerageInvestment Banking and Brokerage40203020 | ||
| Diversified Capital MarketsDiversified capital markets40203030 | ||
| Financial Exchanges & DataFinancial transactions and data40203040 | ||
| Mortgage Real Estate Investment Trusts (REITs)Mortgage Real Estate Investment Trusts (REITs)402040 | Mortgage REITsMortgage REITs40204010 | |
| InsuranceInsurance4030 | InsuranceInsurance403010 | Insurance BrokersInsurance Broker40301010 |
| Life & Health InsuranceLife and health insurance40301020 | ||
| Multi-line InsuranceMulti-line insurance40301030 | ||
| Property & Casualty InsuranceProperty Insurance40301040 | ||
| ReinsuranceReinsurance40301050 |
Characteristics of the financial services industry
The financial services sector currently accounts for 10.96% of the total market weight. There are currently 1,518 stocks in this sector.
Sector Advantages
- An increase in long-term or short-term interest rates will promote the rise of this sector;
- Compared with historical valuation levels and other sectors, the valuation of this sector is quite attractive.
Sector Disadvantages
- The current high cash levels and low loan volume levels are hindering the sector’s upward trend;
- When economic growth approaches its peak, it will suppress the overall performance of the market;
- Increased banking supervision will also have a certain inhibitory effect on the rise of this sector;
- Fintech companies will transfer some of the market share of traditional banks.
Common stocks and ETFs in the industry
- Visa (V)
- JPMorgan Chase (JPM)
- Bank of America (BAC)
- Financial Select Sector SPDR Fund (XLF)
3.Healthcare
The healthcare sector consists of two main segments: companies that develop biotechnology-based drugs and treatments, including analytical tools and supplies needed for clinical trials to test these treatments, and companies that provide medical equipment and services, such as surgical supplies, medical diagnostic tools, and health insurance.
The GICS code for the healthcare sector is: 35
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $7.51T |
| Market Weight | 14.20% |
| Price-to-earnings ratio (GAAP actual last year) | 31.73 |
| P/E (this year’s valuation) | 29.98 |
| Corporate Value | $186.46B |
| EPS (TTM) | $7.37 |
| EPS Growth (TTM vs. Prior TTM) | 211.63% |
| Revenue Growth (TTM vs. Prior TTM) | 200.16$ |
| Return on Equity (TTM) | 19.64% |
| Return on Investment (TTM) | 15.01% |
| Total Debt/Equity (TTM) | 56.76 |
| Dividend Yield (TTM) | 2.13% |
Data source: Fidelity
Industries covered by healthcare
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Health Care Equipment & ServicesHealthcare equipment and services3510 | Health Care Equipment & Supplies Health Care Equipment & Supplies351010 | Health Care Equipment 35101010 |
| Health Care SuppliesHealth Products35101020 | ||
| Health Care Providers & ServicesHealthcare Providers and Services351020 | Health Care DistributorsHealthcare Distributors35102010 | |
Health Care Services35102015 | ||
| Health Care FacilitiesHealth care facilities35102020 | ||
| Managed Health CareManaged Health Care35102030 | ||
| Health Care TechnologyHealthcare Technology351030 | Health Care Technology35103010 | |
| Pharmaceuticals, Biotechnology & Life SciencesPharmaceuticals, Biotech and Life Sciences3520 | BiotechnologyBiotechnology352010 | Biotechnology 35201010 |
| Pharmaceuticalsdrug352020 | Pharmaceuticalsdrug35202010 | |
| Life Sciences Tools & ServicesLife Sciences Tools and Services352030 | Life Sciences Tools & ServicesLife Sciences Tools and Services35203010 |
Healthcare Industry Sector Introduction
The sector currently accounts for 14.20% of the total market weight. There are currently 408 stocks in this sector.
Sector Advantages
- Most companies in this sector have strong balance sheets with ample cash for dividends and acquisitions;
- The aging trend of the global population and the continued growth of emerging markets will be conducive to the upward trend of this sector;
- Demand for elective surgeries, drug sales, and medical devices is gradually recovering;
- Current valuations are attractive relative to the sector’s historical levels.
Sector Disadvantages
- The number of professionals providing care is declining, while the associated costs are increasing;
- New competition from retailers such as Amazon Care will have a certain impact on the traditional earnings of this sector.
Common stocks and ETFs in the industry
- UnitedHealth Group Incorporated (UNH)
- Johnson & Johnson (JNJ)
- Eli Lilly and Company (LLY)
- Pfizer Inc. (PEF)
- AbbVie Inc. (ABBV)
- Health Care Select Sector SPDR ETF (XLV)
- Invesco S&P 500 Equal Weight Health Care ETF (RYH)
- iShares Global Healthcare ETF (IXJ)
4. Consumer Discretionary
The consumer discretionary sector, called Consumer Discretionary in English, mainly includes goods based on the financial status of consumers (can you explain it further?), so discretionary consumption is affected by factors such as the overall economic environment and interest rates.
This sector mainly includes various physical retail companies and e-commerce companies including automobile sales companies, luxury goods sales companies, leisure product retail companies, etc., as well as service companies including hotels and restaurants.
The GICS code for the Consumer Discretionary sector is: 25.
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $6.98T |
| Market Weight | 11.45% |
| Price-to-earnings ratio (GAAP actual last year) | 24.92 |
| P/E (this year’s valuation) | 34.29 |
| Corporate Value | $415.26B |
| EPS (TTM) | $14.03 |
| EPS Growth (TTM vs. Prior TTM) | 250.25% |
| Revenue Growth (TTM vs. Prior TTM) | 40.23% |
| Return on Equity (TTM) | 79.60% |
| Return on Investment (TTM) | 13.64% |
| Total Debt/Equity (TTM) | 335.52 |
| Dividend Yield (TTM) | 2.15% |
Data source: Fidelity
Non-essential consumer goods include
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Automobiles & ComponentsAutomobiles and parts2510 | Auto ComponentsAuto Parts251010 | Auto Parts & EquipmentAuto parts and equipment25101010 |
| Tires & RubberTires and rubber25101020 | ||
| Automobilescar251020 | Automobile ManufacturersAutomakers25102010 | |
| Motorcycle ManufacturersMotorcycle Manufacturers25102020 | ||
| Consumer Durables & ApparelConsumer durables and apparel2520 | Household DurablesHome durable goods252010 | Consumer ElectronicsConsumer Electronics25201010 |
| Home FurnishingsHome Furnishings25201020 | ||
| HomebuildingHousing construction25201030 | ||
| Household AppliancesHome Equipment25201040 | ||
| Housewares & SpecialtiesHomewares & Specialties25201050 | ||
| Leisure ProductsLeisure Products252020 | Leisure ProductsLeisure Products25202010 | |
| Textiles, Apparel & Luxury GoodsTextiles, Apparel and Luxury Goods252030 | Apparel, Accessories & Luxury GoodsApparel, Accessories & Luxury Goods25203010 | |
| FootwearFootwear25203020 | ||
| Textilestextile25203030 | ||
| Consumer ServicesConsumer Services2530 | Hotels, Restaurants & LeisureHotels, Restaurants and Leisure253010 | Casinos & GamingCasino and Games25301010 |
| Hotels, Resorts & Cruise LinesHotels, Resorts and Cruise Lines25301020 | ||
| Leisure FacilitiesLeisure facilities25301030 | ||
| RestaurantsDining room25301040 | ||
| Diversified Consumer ServicesHotels, Restaurants and Leisure253020 | Education ServicesEducational Services25302010 | |
| Specialized Consumer ServicesProfessional consumer services25302020 | ||
| Retailingretail2550 | DistributorsDistributor255010 | DistributorsDistributor25501010 |
| Internet & Direct Marketing RetailInternet and Direct Sales Retail255020 | Internet & Direct Marketing RetailInternet and Direct Sales Retail25502020 | |
| Multiline RetailMulti-line retail255030 | Department Storesdepartment store25503010 | |
| General Merchandise Storesgrocery store25503020 | ||
| Specialty RetailSpecialty Retail255040 | Apparel RetailClothing Retail25504010 | |
| Computer & Electronics RetailComputer and Electronics Retail25504020 | ||
| Home Improvement RetailHome Decor Retail25504030 | ||
| Specialty StoresSpecialty Stores25504040 | ||
| Automotive RetailAutomotive Retail25504050 | ||
| Homefurnishing RetailHome Furnishing Retail25504060 |
Characteristics of non-essential industries
The sector currently accounts for 11.45% of the total market weight. There are currently 290 stocks in the sector.
Sector Advantages
As employees return to work, the sector will see an upward trend;
The expansion of online retail models will promote the rise of the retail industry;
Rapidly rising housing prices will promote positive development of the overall retail industry, including home improvement companies;
Sector Disadvantages
The sector’s performance is overly concentrated in Internet sales and automobiles;
The semiconductor shortage has put enormous pressure on automobile and consumer electronics production;
High interest rates reduce consumers’ spending power, thus discouraging consumption;
Common stocks and ETFs in the industry
- eBay Inc. (EBAY)
- Ford Motor Co.(F)
- Amazon.com, Inc. (AMZN)
- McDonald’s Corporation (MCD)
- Tesla, Inc. (TSLA)
- iShares US Consumer Discretionary ETF (IYC)
- Invesco S&P Small Cap Consumer Discretionary ETF (PSCD)
- ProShares Online Retail ETF (ONLN)
5.Industries
The industrial sector covers a variety of company types involved in heavy equipment, mainly divided into three categories: capital goods, commercial and professional services, and transportation. These include companies that provide aviation, railways, logistics and transportation, defense, construction and engineering equipment, as well as companies that provide related services.
The GICS code for the industrial sector is: 20.
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $5.13T |
| Market Weight | 7.96% |
| Price-to-earnings ratio (GAAP actual last year) | 27.79 |
| P/E (this year’s valuation) | 30.94 |
| Corporate Value | $63.67B |
| EPS (TTM) | $6.89 |
| EPS Growth (TTM vs. Prior TTM) | 53.73% |
| Revenue Growth (TTM vs. Prior TTM) | 21.04% |
| Return on Equity (TTM) | 18.78% |
| Return on Investment (TTM) | 10.28% |
| Total Debt/Equity (TTM) | 86.15 |
| Dividend Yield (TTM) | 2.11% |
Data source: Fidelity
Industries included in the industry
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Capital Goods 2010 | Aerospace & Defense201010 | Aerospace & Defense20101010 |
| Building ProductsBuilding Products201020 | Building ProductsBuilding Products20102010 | |
| Construction & EngineeringArchitecture and Engineering201030 | Construction & EngineeringArchitecture and Engineering20103010 | |
| Electrical EquipmentElectronic devices201040 | Electrical Components & EquipmentElectrical components and equipment20104010 | |
| Heavy Electrical EquipmentHeavy electrical equipment20104020 | ||
| Industrial ConglomeratesIndustrial Group201050 | Industrial ConglomeratesIndustrial Group20105010 | |
| Machinerymechanical201060 | Construction Machinery & Heavy TrucksIndustrial machinery and heavy trucks20106010 | |
| Agricultural & Farm MachineryAgriculture and agricultural machinery20106015 | ||
| Industrial MachineryIndustrial Machinery20106020 | ||
| Trading Companies & DistributorsTrading companies and distributors201070 | Trading Companies & DistributorsTrading companies and distributors20107010 | |
| Commercial & Professional ServicesBusiness and Professional Services2020 | Commercial Services & SuppliesBusiness Services and Supplies202010 | Commercial PrintingCommercial Printing20201010 |
| Environmental & Facilities ServicesEnvironmental and facility services20201050 | ||
| Office Services & SuppliesOffice Services and Supplies20201060 | ||
| Diversified Support ServicesDiversified support services20201070 | ||
| Security & Alarm ServicesSecurity and Alarm Services20201080 | ||
| Professional ServicesProfessional Services202020 | Human Resource & Employment ServicesHuman Resources and Employment Services20202010 | |
| Research & Consulting ServicesResearch and consulting services20202020 | ||
| Transportationtransportation2030 | Air Freight & LogisticsAir Freight and Logistics203010 | Air Freight & LogisticsAir Freight Logistics20301010 |
| AirlinesAir Transport203020 | AirlinesAir Transport20302010 | |
| MarineOcean Freight203030 | MarineOcean transport20303010 | |
| Road & RailRoad and Rail203040 | RailroadsRail transport20304010 | |
| TruckingTruck Transport20304020 | ||
| Transportation InfrastructureQuiver Infrastructure203050 | Airport ServicesAirport Services20305010 | |
| Highways & RailtracksRoad and rail20305020 | ||
| Marine Ports & ServicesMarine Ports and Services20305030 |
Industrial characteristics
The sector currently accounts for 7.96% of the total market weight. There are currently 467 stocks in this sector.
Sector Advantages
- In an environment of global economic growth, capital demand continues to increase, and this sector is a direct beneficiary;
- Many companies in the sector are performing relatively well on a fundamental basis amid rising earnings expectations;
- As geopolitical risks rise, increased defense spending will drive the sector’s performance;
- The rise of global trade and online shopping has strongly stimulated the development of the transportation industry.
Sector Disadvantages
- Rising fuel prices can have an adverse impact on the transportation and aviation industries.
Common stocks and ETFs in the industry
- United Parcel Service, Inc.(UPS)
- Union Pacific Corporation (UNP)
- Raytheon Technologies Corporation (RTX)
- Honeywell International Inc. (HON)
- Caterpillar Inc. (CAT)
- iShares US Aerospace & Defense ETF (ITA)
- Invesco Aerospace & Defense ETF (PPA)
6. Communication Services
The communications services sector is the newest sector in the current GICS sector setup and includes several industries that were once part of other sectors.
This sector mainly includes telecommunication service providers, media companies and entertainment companies, including traditional fixed-line service providers, wireless telecommunication network service providers, traditional television and broadcasting companies and emerging streaming media companies.
The GICS code for the Communications Services sector is: 50.
The fundamental information of this sector as of May 2022:
| Market Cap | $4.84T |
| Market Weight | 8.64% |
| Price-to-earnings ratio (GAAP actual last year) | 16.90 |
| P/E (this year’s valuation) | 19.96 |
| Corporate Value | $603.11B |
| EPS (TTM) | $38.44 |
| EPS Growth (TTM vs. Prior TTM) | 41.36% |
| Revenue Growth (TTM vs. Prior TTM) | 27.92% |
| Return on Equity (TTM) | 20.56% |
| Return on Investment (TTM) | 14.51% |
| Total Debt/Equity (TTM) | 67.27 |
| Dividend Yield (TTM) | 5.79% |
Data source: Fidelity
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Industries covered by communications services
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Telecommunication ServicesTelecommunications Services5010 | Diversified Telecommunication ServicesDiversified telecommunications services501010 | Alternative CarriersAlternative operators50101010 |
| Integrated Telecommunication ServicesIntegrated telecommunications services50101020 | ||
| Wireless Telecommunication ServicesWireless telecommunications services501020 | Wireless Telecommunication ServicesWireless telecommunications services50102010 | |
| Media & EntertainmentMedia & Entertainment5020 | Mediamedia502010 | Advertisingadvertise50201010 |
| Broadcastingbroadcast50201020 | ||
| Cable & SatelliteLimited and Satellite50201030 | ||
| Publishingpublishing50201040 | ||
| Entertainmententertainment502020 | Movies & EntertainmentMovies and Entertainment50202010 | |
| Interactive Home EntertainmentInteractive Family Entertainment50202020 | ||
| Interactive Media & ServicesInteractive Media and Services502030 | Interactive Media & ServicesInteractive Media and Services50203010 |
Characteristics of the communications services industry
The sector currently accounts for 8.64% of the total market weight. There are currently 162 stocks in this sector.
Sector Advantages
- Currently, social media has a clear competitive advantage over other industries;
- The promotion of 5G networks will further boost the sector’s performance;
- Government investment in infrastructure will reduce the cost of using 5G networks.
Sector Disadvantages
- The ability of some brands, such as Apple, to block ads could affect the advertising revenue of social media companies;
- Increasing antitrust regulation will affect the revenues of search engines and social media companies;
- Streaming services run the risk of becoming saturated, which could limit price increases as new competing companies enter the market;
- The sector trend is mainly influenced by the two giant companies Facebook and Google, whose trends have a very significant impact on the overall trend of the sector;
Common stocks and ETFs in the industry
- Alphabet Inc. (GOOGL)
- Meta Platforms, Inc. (FB)
- Verizon Communications Inc. (VZ)
- The Walt Disney Company (DIS)
- AT&T Inc. (T)
- Netflix, Inc. (NFLX)
- Communication Services Select Sector SPDR Fund (XLC)
- Invesco S&P 500 Equal Weight Communication Services ETF (EWCO)
- iShares Global Comm Services ETF (IXP)
7. Consumer Staples
The consumer staples sector mainly includes goods and services that consumers need regardless of their financial situation, such as food, tobacco, beverages, household and personal care products, as well as manufacturers and distributors of these products, such as tobacco manufacturing companies, and sales companies such as supermarkets.
The GICS code for the Consumer Staples sector is: 30.
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $4.44T |
| Market Weight | 6.82% |
| Price-to-earnings ratio (GAAP actual last year) | 22.52 |
| P/E (this year’s valuation) | 19.68 |
| Corporate Value | $198.22B |
| EPS (TTM) | $5.15 |
| EPS Growth (TTM vs. Prior TTM) | 27.92% |
| Revenue Growth (TTM vs. Prior TTM) | 11.13% |
| Return on Equity (TTM) | 7.16% |
| Return on Investment (TTM) | 14.05% |
| Total Debt/Equity (TTM) | -96.13 |
| Dividend Yield (TTM) | 2.50% |
Data source: Fidelity
Industries covered by essential consumption
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Food & Staples RetailingVideo and essentials retail3010 | Food & Staples RetailingFood and essentials retail301010 | Drug RetailPharmaceutical Retail30101010 |
| Food DistributorsFood Distributors301010120 | ||
| Food RetailFood Retail30101030 | ||
| Hypermarkets & Super Centers30101040 | ||
| Food, Beverage & TobaccoFood, Beverages and Tobacco3020 | Beveragesdrinks302010 | BrewersBrewers30201010 |
| Distillers & VintnersRectifiers and Vintners30201020 | ||
| Soft DrinksSoft Drinks30201030 | ||
| Food ProductsFood Products302020 | Agricultural ProductsAgricultural products30202010 | |
| Packaged Foods & MeatsPackaged foods and meats30202030 | ||
| Tobaccotobacco302030 | Tobaccotobacco30203010 | |
| Household & Personal ProductsHousehold and Personal Products3030 | Household ProductsHousehold Products303010 | Household ProductsHousehold Products30301010 |
| Personal ProductsPersonal Products303020 | Personal ProductsPersonal Products30302010 |
Characteristics of the consumer staples industry
The sector currently accounts for 6.82% of the total market weight. There are currently 154 stocks in this sector.
Sector Advantages
- Companies in this sector generally have stable profitability;
- Companies in this sector are committed to minimizing costs to achieve better profitability;
- The recovery of the catering industry has stimulated the demand for food wholesale, thereby driving the overall sector up;
- Some companies are able to pass on higher costs well, thereby stabilizing returns.
Sector Disadvantages
- Although certain costs can be passed on, companies in this sector generally face higher input costs;
- If interest rates rise faster than expected economic growth, it could set back the industry’s upward trend.
Common stocks and ETFs in the industry
- Walmart Inc. (WMT)
- The Procter & Gamble Company (PG)
- The Coca-Cola Company (KO)
- PepsiCo, Inc. (PEP)
- Costco Wholesale Corporation (COST)
- Philip Morris International Inc.(PM)
- Consumer Staples Select Sector SPDR Fund (XLP)
- Vanguard Consumer Staples ETF (VDC)
- iShares US Consumer Staples ETF (IYK)
8. Energy
The energy sector mainly targets the oil and natural gas industries, including oil exploration and production companies, as well as natural gas exploration, storage and marketing companies. It also involves producers of other consumable energy such as coal and ethanol, as well as companies that provide equipment, materials and related services during the exploration, storage and production process.
The GICS code for the energy sector is: 10.
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $3.80T |
| Market Weight | 4.17% |
| Price-to-earnings ratio (GAAP actual last year) | 12.88 |
| P/E (this year’s valuation) | 9.51 |
| Corporate Value | $148.00B |
| EPS (TTM) | $4.81 |
| EPS Growth (TTM vs. Prior TTM) | 1,554.17% |
| Revenue Growth (TTM vs. Prior TTM) | 74.31% |
| Return on Equity (TTM) | 19.55% |
| Return on Investment (TTM) | 9.71% |
| Total Debt/Equity (TTM) | 63.69 |
| Dividend Yield (TTM) | 4.32% |
Data source: Fidelity
Energy industries
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Energyenergy1010 | Energy Equipment & ServicesEnergy Equipment and Services101010 | Oil & Gas DrillingOil and gas drilling10101010 |
| Oil & Gas Equipment & ServicesOil and Gas Equipment and Services10101020 | ||
| Oil, Gas & Consumable FuelsOil, Gas and Consumable Fuels101020 | Integrated Oil & GasIntegrated Oil and Gas10102010 | |
| Oil & Gas Exploration & ProductionOil and Gas Exploration and Production10102020 | ||
| Oil & Gas Refining & MarketingOil and gas refining and marketing10102030 | ||
| Oil & Gas Storage & TransportationOil and gas reserves10102040 | ||
| Coal & Consumable FuelsCoal and consumable fuels10102050 |
Characteristics of the energy industry
The sector currently accounts for 4.17% of the total market weight. There are currently 217 stocks in this sector.
Sector Advantages
- In the current environment of reduced energy supply caused by the Russian-Ukrainian war, the sector is trending upward;
- Large, diversified energy companies have strong balance sheets and excellent expense and investment management self-regulation capabilities;
- The valuation of this sector is more attractive than other sectors.
Sector Disadvantages
- Oil prices have risen to levels that are weighing on the economy and the amount of oil demanded;
- As global economic expansion slows, the sector may face a subsequent slowdown in growth;
- Increased regulatory efforts may limit the sector’s upward momentum;
- When the situation of the war between Russia and Ukraine eases and sanctions on Iran are relaxed, oil supply will be restored, which may cause the sector to decline;
- With the promotion of clean energy, the demand for oil will decrease.
Common stocks and ETFs in the industry
- Exxon Mobil Corporation (XOM)
- Chevron Corporation (CVX)
- Shell plc (SHEL)
- TotalEnergies SE (TTE)
- BP plc (BP)
- Energy Select Sector SPDR Fund(XLE)
- Vanguard Energy ETF (VDE)
- Alerian MLP ETF (AMLP)
9. Real Estate
The real estate sector mainly includes real estate developers and managers, including real estate developers, real estate operating companies, etc. At the same time, trust funds for various physical real estate investments are also included in this sector, such as common industrial, hotel, residential, office and medical real estate investment trusts.
The GICS code for the real estate sector is: 60.
The fundamental information of this sector as of May 2022:
| Market Cap | $1.65T |
| Market Weight | 2.92% |
| Price-to-earnings ratio (GAAP actual last year) | 33.65 |
| P/E (this year’s valuation) | 28.90 |
| Corporate Value | $47.19B |
| EPS (TTM) | $3.41 |
| EPS Growth (TTM vs. Prior TTM) | 124.10% |
| Revenue Growth (TTM vs. Prior TTM) | 28.91% |
| Return on Equity (TTM) | 15.71% |
| Return on Investment (TTM) | 5.15% |
| Total Debt/Equity (TTM) | 163.88 |
| Dividend Yield (TTM) | 3.01% |
Data source: Fidelity
Real estate industries
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| Real Estatereal estate6010 | Equity Real Estate Investment Trusts (REITs)Equity REITs(REITs)601010 | Diversified REITsDiversified Electric Power Investment Trust Fund601010101 |
| Industrial REITsIndustrial REITs60101020 | ||
| Hotel & Resort REITsHotel and Resort REITs60101030 | ||
| Office REITsOffice REITs60101040 | ||
| Health Care REITsHealthcare REITs60101050 | ||
| Residential REITsResidential REITs60101060 | ||
| Retail REITsRetail REITs60101070 | ||
| Specialized REITsSpecialty REITs60101080 | ||
| Real Estate Management & DevelopmentReal estate management and development601020 | Diversified Real Estate ActivitiesDiversified real estate activities60102010 | |
| Real Estate Operating CompaniesReal estate operating company60102020 | ||
| Real Estate DevelopmentReal Estate Development60102030 | ||
| Real Estate ServicesReal Estate Services60102040 |
Characteristics of the real estate industry
The sector currently accounts for 2.92% of the total market weight. There are currently 368 stocks in this sector.
Sector Advantages
With the Federal Reserve’s interest rate cuts, it is easier for investors to raise funds, allowing REITs to bring attractive high dividends;
With the rapid development of technology services and e-commerce, industries such as warehouses, data centers, and telecommunications towers have shown a clear upward trend;
Single-family REITs have been strong as rental prices have risen;
Long-term demographic data results will lead to a resumption of construction of nursing and assisted living facilities, stimulating the overall trend of the industry;
Sector Disadvantages
If the Fed starts raising interest rates, the industry will be directly impacted;
The development of e-commerce has led to the reduction of physical stores, which has affected retail REITs;
Working from home has reduced the need for offices, thereby reducing the demand for office real estate;
Common stocks and ETFs in the industry
- American Tower Corporation (AMT)
- Prologis, Inc. (PLD)
- Crown Castle International Corp. (CCI)
- Simon Property Group, Inc. (SPG)
- Digital Realty Trust, Inc. (DLR)
- Nuveen Short-Term REIT ETF (NURE)
- iShares Residential and Multisector Real Estate ETF (REZ)
10. Materials
The materials sector mainly includes companies that provide a variety of commodities for manufacturing and other applications, including mining companies, forest products companies, paper companies, chemical producers, building materials producers, packaging manufacturers and container manufacturers. The overall sector has certain cyclical value characteristics.
The GICS code for the materials sector is: 15.
The fundamental information of this sector as of May 2022:
| Market Cap | $2.59T |
| Market Weight | 2.77% |
| Price-to-earnings ratio (GAAP actual last year) | 10.32 |
| P/E (this year’s valuation) | 10.15 |
| Corporate Value | $55.78B |
| EPS (TTM) | $5.97 |
| EPS Growth (TTM vs. Prior TTM) | 229.51% |
| Revenue Growth (TTM vs. Prior TTM) | 33.97% |
| Return on Equity (TTM) | 27.27% |
| Return on Investment (TTM) | 12.82% |
| Total Debt/Equity (TTM) | 103.48 |
| Dividend Yield (TTM) | 4.07% |
Data source: Fidelity
Industries covered by the materials
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| MaterialsMaterial1510 | ChemicalsChemicals151010 | Commodity ChemicalsCommercial Chemicals15101010 |
| Diversified ChemicalsMulti-Chemicals15101020 | ||
| Fertilizers & Agricultural ChemicalsFertilizers and pesticides15101030 | ||
| Industrial GasesIndustrial Gases15101040 | ||
| Specialty ChemicalsSpecialty Chemicals15101050 | ||
| Construction MaterialsBuilding Materials151020 | Construction MaterialsBuilding Materials15102010 | |
| Containers & PackagingContainers and packaging151030 | Metal & Glass ContainersMetal and glass containers15103010 | |
| Paper PackagingPaper packaging15103020 | ||
| Metals & MiningMetals & Mining151040 | Aluminumaluminum15104010 | |
| Diversified Metals & MiningDiversified Metals and Mining15104020 | ||
| Coppercopper15104025 | ||
| Goldgold15104030 | ||
| Precious Metals & MineralsPrecious Metals and Minerals15104040 | ||
| Silversilver15104045 | ||
| Steelsteel15104050 | ||
| Paper & Forest ProductsPaper and forest products151050 | Forest ProductsForest products15105010 | |
| Paper ProductsPaper products15105020 |
Characteristics of the materials industry sector
The sector currently accounts for 2.77% of the total market weight. There are currently 160 stocks in this sector.
Sector Advantages
- The overall valuation of the sector is attractive;
- Earnings growth is expected to accelerate as metals and agricultural commodity prices strengthen;
- As policy support for clean energy and related infrastructure will stimulate demand for industrial materials and related services;
- Currently, with the sanctions on Russia, commodity and chemical/fertilizer prices are rising.
Sector Disadvantages
- When the economy grows too fast and the Federal Reserve adopts the method of raising interest rates for regulation, the cyclical price industry will limit the upward trend of the sector;
- High energy prices have increased the cost of chemical production, resulting in a decline in profits;
- Severe supply chain bottlenecks will limit the overall rise in cover prices;
- Strict environmental regulations will have certain negative impacts on the industry.
Common stocks and ETFs in the industry
- DuPont de Nemours, Inc. (DD)
- BHP Group Limited (BHP)
- The Sherwin-Williams Company (SHW)
- Freeport-McMoRan Inc. (FCX)
- Air Products and Chemicals, Inc. (APD)
- iShares Global Materials ETF (MXI)
- Materials Select Sector SPDR Fund (XLB)
11. Utilities
The utilities sector mainly covers different types of public utility companies, such as electric utilities, water utilities and natural gas utilities that provide electricity, water and natural gas to residential and commercial users, as well as some independent power companies or renewable electricity producers. Public utility companies are usually regional, such as Duco Energy, which mainly serves the southeastern United States, and Con Edison, which mainly serves the northeastern United States.
The GICS code for the Utilities sector is: 55.
The fundamental information of this sector as of May 6, 2022:
| Market Cap | $1.65T |
| Market Weight | 2.87% |
| Price-to-earnings ratio (GAAP actual last year) | 24.64 |
| P/E (this year’s valuation) | 22.73 |
| Corporate Value | $75.00B |
| EPS (TTM) | $2.43 |
| EPS Growth (TTM vs. Prior TTM) | 23.82% |
| Revenue Growth (TTM vs. Prior TTM) | 11.16% |
| Return on Equity (TTM) | 8.75% |
| Return on Investment (TTM) | 2.87% |
| Total Debt/Equity (TTM) | 183.87% |
| Dividend Yield (TTM) | 4.28% |
Data source: Fidelity
Industries covered by public utilities
| Industry Group (Code) | Industry (code) | Sub-industry (code) |
| UtilitiesPublic Utilities5510 | Electric UtilitiesElectric Utilities551010 | Electric UtilitiesElectric Utilities551010110 |
| Gas UtilitiesNatural Gas Utilities551020 | Gas UtilitiesNatural Gas Utilities55102010 | |
| Multi-UtilitiesMulti-purpose utility company551030 | Multi-UtilitiesMulti-purpose utility company55103010 | |
| Water UtilitiesWater Utilities551040 | Water UtilitiesWater Utilities55104010 | |
| Independent Power and Renewable Electricity ProducersIndependent power and renewable electricity producers551050 | Independent Power Producers & Energy TradersIndependent power producers and energy traders55105010 | |
| Renewable ElectricityRenewable electricity55105020 |
Characteristics of the public utilities industry
The sector currently accounts for 2.87% of the total market weight. There are currently 124 stocks in this sector.
Sector Advantages
- In most economic environments, the industry has a relatively stable development trend;
- As a capital-intensive sector, it requires lower financing costs.
Sector Disadvantages
- As risk decreases, profitability will also decrease accordingly;
- The overall valuation is not overly attractive to investors;
- There is not enough certainty in legislative funding for the clean energy industry at this stage.
Common stocks and ETFs in the industry
- NextEra Energy (NEE)
- Duke ( DUK )
- The Southern Company ( SO )
- Consolidated Edison, Inc. (ED)
- American Electric Power Company, Inc. (AEP)
- NextEra Energy, Inc. (NEE)
- Utilities Select Sector SPDR Fund (XLU)
- Global X MSCI China Utilities ETF (CHIU)
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