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The total value of all companies in the UK FTSE 100 the index is around £2.06trn. However, the index is dominated by 10 mega-cap companies, whose combined value is more than half of the Footsie’s total value.
Four FTSE 100 mega-caps
Currently, these are the four largest FTSE companies:
| Company | Sector | close the market | stock price | 12 month change |
| AstraZeneca | Biopharma | £177.7 billion | 11,504 pp | 25.7% |
| shell | Oil & gas | £175.5bn | 2,534 pp | 30.3% |
| HSBC Holdings | Banking | £124.3bn | 624.6 p | 14.2% |
| Unilever | Consumer goods | £106.5bn | 4,217 pp | 9.5% |
Each of these FTSE companies is top-heavy in their field, although the smallest are worth more than £100bn. (And only two other Footsie companies are worth more than £99bn.)
I immediately noticed that all four stocks have risen in value over the past year. In addition, all four have beaten the wider FTSE 100, which is 6.9% over 12 months. So maybe there is some truth in the old adage about big is beautiful?
I don’t own this super stock
For the record, my husband and I do not own these four stocks in our family portfolio. To be honest, this was a small surprise for me.
Then again, the combined market value of these four businesses is up to £584bn, or more than a quarter (28.3%) of the total capitalization of the FTSE 100. Therefore, we already have a significant impact on these giants through our UK and FTSE 100 index tracking funds.
Which ‘London Pope’ will I buy today?
As a Veteran value investor, I hunt for bargains by looking for fundamentals. Here are the core figures for these four ‘London popes’:
| Company | Price to earnings ratio | Earnings yield | Dividend yield | Close the dividend |
| AstraZeneca | 65.6 | 1.5% | 2.1% | 0.7 |
| shell | 5.3 | 18.7% | 3.8% | 5.0 |
| HSBC Holdings | 12.4 | 8.1% | 3.5% | 2.3 |
| Unilever | 15.9 | 6.3% | 3.5% | 1.8 |
Answer: The first thing I would do is to reject shares of Big Pharma companies AstraZeneca. Based on the fundamentals, this stock looks very expensive to me. Then again, this is a growing company with potential future prospects. Therefore, other investors are willing to pay a premium to own this stock. All the same, it’s not for me.
As for the remaining three mega-cap stocks, they all look pretty cheap to me. In particular, I will snap up a bunch of shell show in a heartbeat, if only I could. After all, they offer a decent cash yield that is covered five times by income.
However, my husband has adopted ethical and environmental requirements for investing, so he prefers that we do not buy stocks of oil & gas producers. So I had to pass on Shell, even though it looked like a bumper offer to me.
Switch to HSBC Holdings, shares in global mega-banks also seem undervalued to me. But this group has significant exposure in China and Hong Kong. I’m not interested in these two areas right now, mostly because of the deteriorating US-China relationship. So HSBC is also out.
Finally, the consumer goods giant Unilever, a company I’ve admired for decades for its ever-increasing sales growth and cash dividends. At a 52-week low, the shares slumped to 3,267.5p in March 2022. I’m happy to have snapped up at this low price.
Hence, with its well-covered dividend yield and reasonable price rating, Unilever is my pick of these London mega-caps!
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