Apple (AAPL) is the world’s largest publicly traded corporation based on profits (and market cap, which is over $1 trillion at the time of this writing). Apple has made $58.7 billion over its last 4 quarters in net profit.
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Meanwhile, Wal-Mart (WMT) is the world’s largest publicly traded corporation based on revenues. Wal-Mart has generated $510 billion in sales over its last 4 quarters.
How do these numbers compare in relation to the world’s governments?
To examine, I am assuming that a government’s revenue is roughly equivalent to a corporation’s revenue.
The choice to use tax revenue as opposed to GDP or GNP was made because a government doesn’t really own the productivity of its citizens. It only has partial claim to that productivity based on taxes.
The table below shows the 10 largest governments in the world based on revenues. Numbers are in millions of USD.
Source: Wikipedia
Based on revenue, Wal-Mart would actually be the 11th largest country in the world, ahead of Spain and Australia which had revenues of $492.4 and $461.0 billion, respectively.
As we saw with comparing Wal-Mart and Apple, revenue is not profit. It’s more difficult to determine the government equivalent of profits.
At first glance, government surplus is a good proxy. Germany has the world’s largest surplus at $25 billion annually…. Less than half of Apple’s annual profits.
But this doesn’t account for all the money the government distributes (unequally) to its citizens and constituents, which could be thought of as a sort of ‘dividend’ or ‘return of capital’. It’s very difficult to sort this number out.
Using Germany as an example again, the country spends around 50% of its budget on social benefits. Said differently, before the German government’s ‘social benefits dividend payment’, it makes around $800 billion in annual profits. That’s more than 13x Apple’s annual profits.
The US government distributes some $2.5 trillion annually in benefits. That’s quite a dividend.
The largest governments in the world absolutely dwarf the size of the largest publicly traded corporations… But the biggest corporations can have the economic impact of mid-sized governments.
This fact should give comfort to dividend investors in established blue-chip stocks. High quality businesses can have exceptional economic strength, comparable even to established governments.
Thanks,
Ben Reynolds
ValueWalk readers can click here to instantly access an exclusive $100 discount on Sure Dividend’s premium online course Invest Like The Best, which contains a case-study-based investigation of how 6 of the world’s best investors beat the market over time.
