What are Mid Cap Stocks? List and Examples

Mid cap stocks tend to be issued by businesses that have established some level of consistency in their industry by being in business for quite a while. They generally have a substantial size, a considerable workforce, and branches or outlets both in their domestic countries and overseas.

These companies tend to be fast-growing businesses that have outgrown being categorized as small caps and some previously large-cap companies who have fallen below the large-cap classification either due to mismanagement of funds, poor sales, bad business models, or lack of diversity.

Since the classification of stocks as mid cap is solely based on the market capitalization of the company that issues it, it is important to note that a stock that is a mid-cap stock today is likely to become a large-cap stock tomorrow; assuming the company experiences a large growth in profits which may alter their stock price and consequently, their market capitalization. Conversely, the mid-cap stock could revert back to being a small-cap stock if its market capitalization falls below two billion dollars.

Before we proceed, let us understand what market capitalization is.

Market capitalization meaning

Market capitalization is a measure of the total market value of a company’s outstanding shares which is usually the product of all the outstanding shares and the current market price. It is expressed as; Market capitalization = Total outstanding shares x Current share price.

The market capitalization is also known as the market cap, hence mid cap stocks are shares whose issuing companies are deemed to have a mid-market cap. This means that for a stock to qualify as a mid cap stock, the product of its issuing company’s total outstanding share and its share price should fall within the range of $2 billion to $10 billion.

Mid cap index

1. S&P MidCap 400
2. Russell Midcap Index
3. Dow Jones U.S. Mid-Cap Total Stock Market Index
4. Wilshire Mid-Cap Index
5. CRSP US Mid Cap Index

The mid cap index is an index that tracks the performance of mid cap stocks. Just like other securities indices, it provides a benchmark for gauging mid-cap stocks. It is therefore used by investors to ascertain if the stocks they want to purchase are at par with similar stocks found in the index. Each of these indexes varies in its categorization of midcap stocks.

Although the general consensus currently is that mid cap stocks fall within the range of $2 billion to $10 billion, the five indexes listed above vary in their median market cap as seen in the table above with Russell Midcap Index and CRSP US Mid Cap Index having an average market cap which is generally considered to be in the range of the large-cap stocks.

S&P MidCap 400 Index

The S&P MidCap 400 is an index that is designed to measure the performance of 400 mid-sized companies. It is used by investors as a benchmark since it reflects the distinctive risks and returns characteristics of the mid cap stocks market segment. The launch date of this index is June 19, 1991, and its first value date was July 1, 1991.

Although named the mid cap 400, the index actually comprises 401 companies in eleven different sectors which include: Industrials, financials, health care, consumer discretionary, information technology, real estate, communications services, materials, energy, utilities, and consumer staples.

List of top ten stocks on S&P MidCap 400

1. Targa Resources Corp.
2. Carlisle Cos.
3. Steel Dynamics Inc.
4. EQT Corporation.
5. Fair Isaac & Co Inc.
6. First Horizon Inc.
7. Essential Utilities Inc.
8. Service Corp Inc.
9. Reliance Steel & Aluminium.
10. Hubbell Inc.

Listed above are the top 10 constituents by index weight as classified by the Global Industry Classification Standard (GICS) sectors as of July 29, 2022.

Russell Midcap Index

The Russell Midcap Index measures the performance of the mid-cap sector in the US equity market. It is a subset of the Russell 1000 Index and was constructed to provide comprehensive and unbiased measurement for the mid cap segment. The index is reconstituted yearly to ensure larger stocks do not distort the characteristics and performance of the true mid cap opportunity set. The inception date of the index is November 1, 1991.

The index includes 828 companies in eleven sectors which include: telecommunications, basics materials, consumer staples, energy, utilities, technology, health care, financials, consumer discretionary, industrials, and real estate.

List of top ten stocks on the Russell Midcap Index

1. Synopsys Inc.
2. Autozone Inc.
3. O’Reilly Automotive Inc.
4. Realty Income Corp.
5. Cadence Design Systems.
6. Iqvia Holdings Inc.
7. Phillips 66.
8. Corteva.
9. Xcel Energy Inc.
10. Williams Companies Inc.

Listed above are the top 10 constituents of the index as of June 30, 2022.

Dow Jones U.S. Mid-Cap Total Stock Market Index

The Dow Jones U.S. Mid-Cap Total Stock Market Index is a member of the Dow Jones Total Stock Market Indices family. It was designed to measure the performance of mid-cap US equity securities. The launch date of this index is February 28, 2005, and its first value date was December 31, 1991.

The index comprises 497 companies in ten different sectors which include: Industrials, financials, health care, consumer services, technology, telecommunications, basic materials, utilities, consumer goods, oil, and gas.

List of top ten stocks on Dow Jones U.S. Mid-Cap Total Stock Market Index

1. Devon Energy Corp.
2. Warner Bros Discovery Inc.
3. VICI Properties Inc.
4. On Semiconductor Corp.
5. Cottera Energy Inc.
6. Diamondback Energy Corp.
7. Apollo Global Management Inc.
8. SolarEdge Technologies Inc.
9. Quanta Services Inc.
10. CF Industries Holdings.

Listed above are the top 10 constituents by index weight as classified by the proprietary sector classification system of the index as of July 29, 2022.

Wilshire US Mid Cap Index

According to the FT Wilshire US Mid Cap Index factsheet, it is the purest and most complete benchmark of the mid-sized (in terms of market capitalization) companies in the U.S equity market. It was released in 1996 with a time series of data beginning on June 30, 1978.

The index comprises 505 companies in eleven different sectors which include: industrials, information technology, materials, real estate, utilities, communication services, consumer discretionary, consumer staples, energy, financials, and health care.

CRSP US Mid Cap Index

The CRSP US Mid Cap Index targets the inclusion of U.S. companies that fall between the top 70 percent to 85 percent of the investible market capitalization. It was first available on the NASDAQ GIDSSM (National Association of Securities Dealers Automated Quotations Global Index Data Service) feed on August 15, 2011.

The index includes securities traded on the New York Stock Exchange (NYSE), Bats Global Market, NYSE American, NYSE ARCA, National Association of Securities Dealers Automated Quotations (NASDAQ), and the Investor Exchange. Reconstitution occurs quarterly after the market closes on the third Friday of March, June, September, and December annually.

List of top ten stocks on CRSP US Mid Cap Index

1. Centene Corporation.
2. Synopsys Inc.
3. Cadence Design Systems.
4. Iqvia Holdings Inc.
5. Realty Income Corporation.
6. Corteva Inc.
7. Amphenol Corporation.
8. Welltower Inc.
9. Digital Realty Trust Inc.
10. Devon Energy Corporation.

Listed above are the top 10 constituents by index weight as of June 30, 2022.

Mid cap stocks list

1. Five Below Inc.
2. Performance Food Group Co.
3. Polaris Inc.
4. Ambarella Inc.
5. Shockwave Medical Inc.
6. United States Steel Corporation.
7. Avis Budget Group Inc.
8. Bread Financial Holdings Inc.
9. Gap Inc.
10. Jazz Pharmaceuticals PLC.
11. Crestwood Equity Partners LP.
12. Nexstar Media Group Inc.
13. American Eagle Outfitters Inc.
14. Alcoa Corp.
15. Graphic Packaging Holding Company.
16. Hanesbrands Inc.
17. Denbury Inc.
18. Boston Beer Company Inc.
19. Churchill Downs, Inc.
20. Tempur Sealy International Inc.
21. Silicon Laboratories Inc.
22. Flex Ltd.
23. Park Hotels & Resorts Inc.
24. Range Resources Corp.
25. MillerKnoll Inc.
26. Enovis Corp.
27. Axos Financial Inc.
28. XPO Logistics Inc.
29. ACI Worldwide Inc.
30. Nordstrom, Inc.
31. Olin Corporation.
32. LivaNova PLC.
33. Mattel Inc.
34. First Solar, Inc.
35. Williams-Sonoma, Inc.
36. Equitrans Midstream Corp.
37. Mp Materials Corp.
38. Wintrust Financial Corp.
39. Coty Inc.
40. NCR Corporation.

Examples of mid cap stocks

In the table below, we shall look at some companies that issue mid-cap stocks. Their stock price, market capitalization, and ticker symbol as listed on the New York Stock Exchange (NYSE) or National Association of Securities Dealers Automated Quotations (NASDAQ) on August 2, 2022.

Features of mid cap stocks

1. Potential for growth
2. Diversity
3. Low risk
4. Good liquidity

The above are the characteristics of mid cap stocks. We shall discuss them briefly below.

Potential for growth

Mid cap stocks generally have good growth potential as they are mostly at the peak of the growth curve. Their issuing companies are more likely to can experience an increase in profitability, productivity, and market share which usually translates into an increase in the share price of the stocks.

Diversity

The fact that these stocks are issued by companies in various sectors ensures that there is diversity in them. Additionally, their sizes also vary due to the market cap range associated with this stock type. Therefore, investors seeking to invest in different economic sectors can benefit from this inherent diversity.

Low risk

Mid cap stocks are considered low-risk stocks, this is because their issuing companies are usually more established than small-cap stocks and are thus more likely to stay in business for a longer period which consequently ensures a good return on the investment (ROI). The companies include young companies which have grown rapidly thereby outgrowing the small-cap category and not-so-young companies that are operating in profitable and stable ways.

Good liquidity

Since these stocks are issued by companies who have been in business for quite a while, the tendency is that both people and the market are familiar with them to a large extent. Additionally, they would have been trading for longer on the stock market which makes them easily and readily liquid.

Mid cap vs large cap

1. Industry diversity
2. Market capitalization
3. Geography
4. Risk factor
5. Stock liquidity
6. Volatility
7. Business stage

Large-cap stocks are stocks issued by companies whose market capitalization falls within the $10 billion to $200 billion range. They are usually very well known and part of the industry giants in their various sectors. Mid-cap stocks on the other hand fall within the $2 billion to $10 billion range. Below, we shall have a look at some differences between these two types of stocks.

Industry diversity

Large-cap companies are generally more diversified than mid cap companies as they usually offer a wider range of products and services compared to mid-caps.

Market capitalization

As earlier stated, the market cap of large caps ranges from $10 billion to $200 billion whereas that of mid caps ranges from $2 billion to $10 billion.

Geography

Although mid caps usually operate both domestically and overseas, large caps on the other hand operate globally, with offices, outlets, or branches in their domestic countries as well as in almost all the continents in the world.

Risk factor

Due to their global presence and long-term stay in business, large caps are considered lower risk compared to mid cap companies.

Stock liquidity

Stocks of large caps are more liquid than those of mid caps due to the fact that the former has been trading for longer and have more availability of willing buyers compared to mid cap stocks.

Volatility

Mid-cap stocks are more likely to experience price fluctuations than the more stable large-cap stocks whose prices are hardly affected by economic changes.

Business stage

Large-cap companies are matured companies that have been in business for a very long time spanning decades whereas mid-cap stocks are upcoming businesses that are still growing.

Mid cap stocks that pay dividends

1. American Eagle Outfitters Inc.
2. Alcoa Corp.
3. Azenta Inc.
4. Valley National Bancorp
5. Belden Inc.
6. Cabot Corp.
7. Churchill Downs, Inc.
8. Unum Group.
9. Dana Inc.
10. Timken Co.
11. Terex Corporation.
12. Emcor Group Inc
13. Equitrans Midstream Corp.
14. Foot Locker, Inc.
15. Graphic Packaging Holding Company.
16. Hanesbrands Inc.
17. ITT Inc.
18. KBR, Inc.
19. Lear Corporation
20. Nordstrom, Inc.
21. Park Hotels & Resorts Inc.
22. Tempur Sealy International Inc.
23. Williams-Sonoma, Inc.
24. Science Applications International Corp.
25. Wintrust Financial Corp.
26. Royal Gold, Inc.
27. TD Synnex Corp.
28. UGI Corp.
29. Xerox Holdings Corp.
30. Vishay Intertechnology Inc.

Frequently asked questions

Conclusion

The process of finding the right mid-cap stock to invest in can be quite tasking and time-consuming. Generally, you should seek companies that have a track record of good industry practices, exceptional business models, adequate growth and reinvestment plans as well as proven evidence of rewarding investors. Investors seeking to purchase mid-cap stocks can do so by investing in a mutual fund, exchange-traded fund (ETF), or real estate investment trust (REIT) that focuses on mid-cap companies.

Being between small caps and large caps gives mid cap stocks some advantages such as being less risky, more stable, and having more returns potential than small-cap stocks. They also tend to have more growth potential than large-cap stocks which are generally more fixed in their growth curve.

Additionally, understanding that the classification of stock as mid cap is an approximation based on its current market cap; meaning that it is not fixed as a mid cap stock can outgrow this range and become a large cap.

Furthermore, no one can predict with absolute accuracy how a stock will turn out over the years, it is thus pertinent to factor in how much risk you are willing to take as well as your financial goals and the amount you are willing to invest before deciding on which stocks or mutual funds to invest in.

In addition, research and analyze the various features, advantages, and disadvantages associated with mid-cap stocks before making an investment.