Every sector in the stock market has a few companies with a clear advantage over others. In some cases, a group of companies is leading the way. We’ll look at the features of a market leader and leaders in each of the 11 sectors of the stock market. The market leaders aren’t necessarily the top-performing stocks at the moment. Over the last few years, they dominated the industry and set the tone for others. It won’t surprise you if any of the stock names listed below are well-known to many investors.
Stock Sectors List
Table of Contents
Stock Market Leaders Overview
What is a market leader? Market leaders in every sector usually hold the largest market share. They also outperform their competitors in various metrics such as brand loyalty, sales, prices, spending, and image.
In some cases, they had a first-mover advantage. This is relevant for relatively new industries still in their early stages of growth.
Other industries have been around for decades, if not centuries. There have been different leaders across time. Companies must invest in research & development and mergers & acquisitions to grow and surpass their competitors.
Innovations and partnerships are huge steps for successful companies. The image a company portrays can also be a huge factor in its growth. Being at the top of the leaderboard comes with its pros and cons. Let’s take a look at some.
Market Leaders Advantages
Being at the top comes with many benefits. First, it becomes easier to produce enormous quantities of products for a much lower price and to set the standards for the rest.
Second, consumers are more likely to purchase their products regardless of price. No matter what product Apple or Tesla put on the market, consumers will rush to buy it.
Finally, market leaders have a lot of power when it comes to negotiating. Everyone wants to conduct business with the best of the best, no matter the cost.
Market Leaders Disadvantages
There aren’t many disadvantages when being at the top, but two come up frequently for market leaders. When companies have too big of a market share, their every move becomes scrutinized. They can often find themselves in the headlines for the smallest detail.
They have to be very careful with every move they make. Next, it becomes more difficult to expand as a business. If they acquire a big competitor, they might be accused of attempting to monopolize the market. Hence, it becomes important to develop products and innovate internally.
Market Leaders for 11 Sectors
In this section, we will take a look at various market leaders in each of the following 11 sectors:
- Information Technology – $XLK
- Healthcare – $XLV
- Energy – $XLE
- Real Estate – $VNQ
- Financial – $XLF
- Basic Materials – $XLB
- Utilities – $XLU
- Industrials – $XLI
- Consumer Staples – $XLP
- Consumer Discretionary – $XLY
- Communications – $XTL
View full Stock Sectors List
1. Communication Services
The communication sector includes telecom companies, internet providers, media and internet providers, and newer forms of communication via the internet.
As you can see, this encompasses a wide range of possibilities. We will focus on two conventional communication services.
Comcast is The first on the market leaders list (NASDAQ: CMCSA). It is the largest cable and internet provider in the US and the largest cable provider in the UK. Comcast also owns NBC Universal.
In the summer of 2021, Comcast and Viacom CBS joined forces to launch a streaming service in 20 European countries as of 2022. Let’s see how much Europeans are willing to listen to US channels.
Next is T-Mobile (NASDAQ: T-MUS). I think none of us have been spared by T-Mobile or Verizon ads. T-Mobile acquired Spring in 2020. They are one of the leading telecom providers in the US, with leading 5G coverage.
They have subsidiaries in 12 European countries, which almost match US clients. Look for them to follow their competitors and expand more.
2. Consumer Discretionary
The consumer discretionary sector serves financially stable customers. Products are mainly aimed at the middle and upper classes.
They are higher priced and luxury items. There are things you need and then things you want.
What would you prefer between Sketchers or Nike? In most cases, the answer is Nike. However, not everybody can afford a brand-new pair with double the price tag.
Nike (NYSE: NIKE) and Adidas (OTCMKTS: ADDYY) set themselves apart in sports apparel. Some shoes can be worth more than $200-300, and many families can’t spend that much on shoes.
The same can be said for an essential morning product. How many of us go to Starbucks (NASDAQ: SBUX) every morning or afternoon instead of making it at home or a local shop? Maybe it’s simply to show off our cup. Is the coffee better? These stocks also apply to luxury car brands, clothing, and entertainment.
3. Consumer Staples
The last market leaders section was about wants. This one is about needs. Which products do we need daily regardless of our financial situation? Food and medicine seem to answer that question. Their stocks usually outperform other sectors during a financial crisis.
Costco (NASDAQ: COST) and Walmart (NYSE: WMT) are excellent options in this sector. Thousands of Americans go there daily to buy cheap products or in bulk. T
hey are also present in various countries around the world. They may not have the best quality products, but they are very convenient.
Procter & Gamble (NYSE: PG) has become a leader in household products, home care, and health care. They make many brands we own in our homes. CVS Health (NYSE: CVS) is an American healthcare company focused on bringing basic pharmaceuticals to everyone.
4. Energy
Recently, this has been a hot topic for market leaders. Prices around the world are increasing. The war between Russia and Ukraine isn’t helping. Major energy stocks have been increasing over the last weeks.
Which ones are the best moving forward? However, this isn’t only about oil. Renewables also have a big role to play in our future. Solar, wind, and electric power are also important.
Brookfield Renewable (NYSE: BEP) is a Canadian company with a huge renewable portfolio. It’s worth a look. On the flip side, there isn’t a shortage of oil and gas stocks. Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX), and Conoco Phillips (NYSE: COP) are all major plays in the sector. They have a huge global portfolio and are beginning to diversify into renewables.
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5. Financials
This sector is one of the easiest to invest in. There are many good options. We use financial services every day, and they aren’t going anywhere.
They are evolving with the surge in crypto and blockchain, but many prefer the conventional ways.
Visa (NYSE: V), MasterCard (NYSE: MA), and PayPal (NASDAQ: PYPL) are known around the world. Hence why they’re market leaders. Merchants use them daily, and purchases are constantly made with their services. On the other hand, major banks also have a big role to play.
They offer valuable services for everyone, from depositing your cheque to investing your money and offering a mortgage. JPMorgan (NYSE: JPM) is the largest US bank and leads in many metrics. However, Bank of America (NYSE: BAC) or Morgan Stanley (NYSE: MS) are also solid choices.
Let’s not forget the giant of all giants—the most expensive stock on the market. Berkshire Hathaway (NYSE: BRK.A or BRK.B) is a holding company led by legendary investor Warren Buffet. The company invests in other stocks. Shareholders benefit if the purchases yield good results.
6. Health Care
I briefly mentioned the healthcare sector earlier with CVS Health. There is much more to it. It is separated into several components.
First, some companies develop drugs, such as biotechs. With the pandemic, two US companies easily come to mind. Johnson & Johnson (NYSE: JNJ) and Pfizer (NYSE: PFE) are the top US companies and part of the top 3 in the world.
Second, some companies make various medical devices for patients. Abbott Laboratories (NYSE: ABT) is a great example. Their business isn’t only centered on developing new equipment but also into well-known nutrition brands.
Finally, there are healthcare provider stocks. In other words, hospitals, clinics, and health facilities. Many virtual healthcare companies emerged in the last few years. One such example is Teladoc Health (NYSE: TDOC). Their goal is to help their clients remotely and with the best technology. It is still a recent industry with tons of growth potential. Remember Elon Musk’s Neuralink? Also another great example.
7. Industrials
Many different areas fall into this market leaders category—companies with heavy equipment such as trains, planes, or even logistics companies.
Anything transportation or aerospace-linked fits. Over one year ago, a cargo ship was stuck in the Suez Canal, creating global supply consequences.
FedEx (NYSE: FDX) and UPS (NYSE: UPS) are great choices for transportation and logistics services worldwide. The biggest railroad stock by market cap belongs to Union Pacific (NYSE: UNP).
Many Canadian companies, such as Canadian National Railway (NYSE: CNI) and Canadian Pacific Railway (NYSE: CP), are giving US companies a good run for their money. For more information on this industry, you can look at this article.
8. Information Technology
This one isn’t very difficult to figure out. Think of any tech stock. They all fit the description of market leaders.
Apple (NASDAQ: AAPL), Google (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), as well as semi-conductor stocks such as Nvidia (NASDAQ: NVDA).
There is constant innovation in this industry, such as the Metaverse.
This industry deserves a lot of attention.
9. Materials
Once again, this industry encompasses a wide range of companies, from minerals and metals to chemicals, construction, and packaging. The state of the economy is a huge factor for this industry. Generally, the demand for basic materials delines when the economy isn’t doing well.
The US isn’t known to be a leader in the mining industry. UK-based Rio Tinto (NYSE: RIO) is the world’s second-largest mining and metal company. It produces and mines iron ore, copper, diamonds, gold, and uranium, among other things.
It trails the Australian company BHP Group (NYSE: BHP). Their activities are similar, but BHP also works in the transportation and engineering fields.
Chemicals manufacturers DuPont (NYSE: DD) and their many competitors are worth a look for anyone interested in the chemicals industry. However, it is not the cleanest nor the most ethical.
10. Real Estate
If you haven’t heard about REITs, now is the time to get informed. They develop and manage real estate. In the meantime, shareholders enjoy the benefits without the headaches. The real estate industry has been booming for decades now. Some fear the bubble is about to burst, while others are going all-in in the sector.
Airbnb (NASDAQ: ABNB) is a good option for a post-pandemic recovery. People of all ages and social statuses book homes and vacations using the platform. New destinations in funky places are always sought, and the platform has the answer.
As for REITs, American Tower (NYSE: AMT) might be one of the best options. They own wireless and broadcast infrastructure around the world. In the US alone, they own around 43,000 wireless towers. Their business works very well and doesn’t seem to be slowing down.
11. Utilities
Here we go, the final sector. They are the companies that deliver water, electricity, heat, and other utilities.
In the US, Nextera Energy (NYSE: NEE) and Duke Energy (NYSE: DUK) are at the top of the list. Both supply electricity and gas in Canada and the US.
This is a sector that isn’t affected by the economy since everyone always needs basic energy in their home.
Final Thoughts: Stock Market Leaders
Now that we know which market leaders and stocks are among the best in each sector, it’s time to put our knowledge to good use. I wrote very briefly about individual stocks. Hence, digging deeper and choosing the best ones from above is best.
However, many other stocks in the same sector exist but are often forgotten. Don’t forget to look them up as well. There exist several ETFs that follow certain sectors or that take the best stocks from each. Sticking to only one sector is difficult, and there tend to be cycles. Stay diversified and make smart investment decisions.
If you want to learn more about profiting from the stock market, head to our free library of educational courses. We have something for everyone, including trading options for those with small accounts.
Frequently Asked Questions
Apple, Microsoft, and Nvidia are the the top market leaders in the industry. Microsoft has a market cap of $2.89 trillion. Apple has a market cap of $2.63 trillion. Nvidia's market capitalization is $2.16 trillion.
Trends and regulations often shape market leaders. They often participate in staying ahead of the competition and give them a leg up above the competition.
- Creating a brand
- Leader in new technology
- Being a creative leader
- Company growth and revenue
- Nvidia
- Microsoft
- Apple
- Saudi Aramco
McDonald's is currently ranked the 58th most valuable company with a market capitalization of $197.03 billion.
