What Industries Are The Most Profitable Right Now?
Whether you’re looking to start up a new venture, play the stock market or make a long-term investment, there are five sectors that have yielded big, sustained returns over the past few years, and are expected to continue making money for investors into the future.
While nothing is a guaranteed, and there is room to argue how they compare with one another, these areas have seen leading companies post huge profits quarter after quarter and rise steadily in market value. They also seem to have staying power: Forecasts show them to be growth industries that could keep expanding for years.
What fuels the world also fuels profits for global energy companies. Exxon Mobil was 2012′s most profitable firm in any sector, and Chevron was number three. Despite volatilities in the domestic petroleum market, top companies have found no barriers to a pure upward trend in terms of profitability, in large part due to emerging markets like China. Even aside from giants like Exxon Mobil, private U.S. companies in the gas and oil extraction industry saw a 24 percent net profit margin.
It’s not all about fossil fuels, though. Renewables and alternative fuels have been very good for fund investors. Among 1-year and 20-year sector funds, Calvert Global Alternative Energy and Firsthand Alternative Energy made Kiplinger’s top 10 lists.
It’s no secret that Baby Boomers have begun to enter their senior years by the millions, which is expected to put long-term pressure on demands for health care services. Combine this with millions more new health insurance enrollees expected under Obamacare, and this industry should keep booming for a decade or more.
Health care has been a stock market darling recently. Pharmaceuticals were at the vanguard of the S&P 500′s climb in the beginning of 2013, and sector mutual funds like Fidelity Advisor’s Biotechnology and Health Care have proven to be good for short, medium and long-term investments.
Though its profits have fallen off so far in 2013, Apple was the number two biggest moneymaking company of last year, continuing at the forefront of the tech revolution. Its fellow tech powerhouses aren’t far behind, with Microsoft, IBM, Intel, Google and Oracle all showing up alongside the “House that Jobs Built” on Fortune’s list of the 20 most profitable companies of 2012. If one includes telecommunications under the tech banner, it becomes even more attractive as a sector to invest in, as mobile service providers are also boasting big profits.
What some call the “financialization” of the economy was barely put on hold by the global financial crisis, and since the dark days of the 2008 crash, Wall Street has come roaring back. J.P. Morgan Chase cleared over $21 billion in 2012, despite billions in losses from bad market bets, and Wells Fargo was in that ballpark with $19 billion. Those with financials-heavy portfolios have been rewarded by watching them increase in value on average; even in a “subpar” year (Warren Buffett’s words), Berkshire Hathaway rewarded investors with close to $15 billion in profits.
That is correct: Real estate is legitimately a force again in the investment world. Analysts spent 2012 speculating that the housing market was showing signs of a long-sought recovery, and the sector has been producing healthy returns for investors for several straight quarters. Some of the top mutual funds around are in real estate and realty, and if any doubt still lingers, consider that once-moribund Fannie Mae was 2012′s sixth most profitable company, netting $17 billion.
This article was written by Richard Craft, an MBA student who hopes to help you understand the financial market! He recommends taking a look at the business analyst jobs with moneyjobs.com if you’re interested in getting a career in business!