Top 5 Smallest Companies With Biggest Profits

Many relatively smaller companies have proven that huge profits can be generated without being as big as Apple, Amazon or Walmart

When analyzing businesses, we often notice that huge profits are usually associated with large business enterprises. However, there are always some exceptions. For better understanding, let us take some real-life examples of smaller businesses generating large profits.

Royalty Pharma plc (RPRX) – A biopharmaceuticals company, Royalty Pharma plc has market capitalization of around $12.5 billion. It has a revenue of around $2.35 billion, which is quite small when compared to the $640 billion revenue of Walmart. Even then, Royalty Pharma plc has net income of around $1.14 billion. The profit to revenue ratio is significantly high, which is really commendable. Royalty Pharma plc makes most of its money from royalty streams, something that helps reduce overhead costs and boost profitability.

Ares Capital Corporation (ARCC) – A financial services company, Ares Capital Corporation (ARCC) has a market capitalization of around $13 billion. It has revenue of around $2.61 billion, whereas net income is at approx. $1.52 billion. As is evident, the revenue is quite small when compared to big banks like JPMorgan ($158 billion). But profits are still substantial. Ares Capital Corporation (ARCC) primary business is financing middle-market companies.

Cheniere Energy, Inc. – An LNG exporter, Cheniere Energy, Inc. has a market capitalization of around $40 billion. Revenue is around $17.6 billion, whereas net income is approximately $4.9 billion. While the numbers seem huge, they are still a fraction of large energy companies. For example, Exxon Mobil has revenue of $413 billion and profit of $55 billion. Cheniere Energy, Inc. is able to generate large income, since its LNG business has a significant profit margin. And demand for energy products remains stable, irrespective of the evolving economic conditions.

PBF Energy Inc. (PBF) – An energy company focused on oil refining, PBF Energy Inc. has a market capitalization of around $3.5 billion. The company has revenue of around $38.3 billion and net income of around $2.14 billion. PBF Energy Inc.’s market capitalization is quite small when compared to large oil refining businesses such as Saudi Aramco. The latter has a market capitalization of more than $2 trillion. PBF Energy Inc. has benefitted immensely from high crude oil refining margins.

Airbnb, Inc. – A well-known hospitality company, Airbnb, Inc. has a market capitalization of around $85 billion. It has a revenue of around $9.92 billion, whereas net income is at around $4.8 billion. These numbers are significant individually, but are dwarfed when compared to biggies like Amazon that has $574 billion in revenue. Airbnb, Inc. is able to generate high income because it utilizes an asset-light model to operate its hospitality business.