(News Bulletin 247) – According to Janus Henderson, Volkswagen is the listed company with the largest debt in the world in value, while Alphabet has the highest net cash position in the world.

It’s the kind of report that’s full of juicy data. Asset manager Janus Henderson recently published its “Global Corporate Debt Index,” an annual study that ran through the end of June and covers the debt of the world’s 933 largest listed companies, excluding financial and real estate companies.

In this study, Janus Henderson annually establishes the ranking of groups with the highest net debt (gross debt minus cash). The asset manager bases its ranking on the data for each company contained in their most recent annual reports.

Let us clarify that while debt figures may seem staggering in absolute terms, high net debt in absolute terms does not in itself mean that a company is doing badly. This debt should be compared to the results generated (generally the gross operating result, Editor’s note) by the company to determine whether its debt is high or not. This is what is called debt leverage.

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Volkswagen, the largest debt

In value terms, therefore, according to Janus Henderson, Volkswagen is the most indebted listed company in the world, with a net debt of 196 billion dollars, the German group coming top of the ranking for the first time since 2020.

Moreover, car manufacturers are well represented. Toyota ranks second with $179 billion, Ford is sixth with $111 billion, Mercedes ninth with $96 billion and General Motors tenth with $94 billion.

“Carmakers in Japan, the US and Germany were the biggest contributors to the increase in global corporate debt in 2023/24 as strong sales growth increased demand for automotive finance,” says Janus Henderson.

The second sector in the top 10 is telecommunications. Verizon is third with $172 billion, AT&T fourth with $152 billion, Deutsche Telekom fifth with $150 billion, Charter Communications seventh with $98 billion and Comcast eighth with $97 billion.

Janus Henderson explains that telecoms is a sector that is highly capital intensive (i.e. requires a lot of investment, to simplify) and where by definition free cash flows are predictable.

Cash at Big Tech

Conversely, Janus Henderson has also established a ranking of the “cash-richest” companies, i.e. those with the highest net cash position (available cash minus debt).

Unsurprisingly, the ranking is dominated by large American tech groups and Chinese digital giants.

“The extremely strong cash flows of the Big Seven US technology companies helped their collective net cash balance increase by $52 billion over the year, despite spending $210 billion between them on dividends and share buybacks,” Janus Henderson said.

Alphabet ranks first in this ranking, with $81 billion in cash, a figure that has however declined over the years since Google’s parent company posted, according to Janus Henderson data, $111 billion two years ago. The drop in cash is explained both by significant share buybacks ($170 billion cumulative over the last three years, according to Janus Henderson) and by investments.

Besides Alphabet, Apple is fifth in the ranking with $38 billion, Microsoft is seventh with $32 billion and Meta is eighth with $28 billion. Among Chinese groups, the telecoms specialist China Mobile takes second place with $71 billion, Alibaba is fourth with $61 billion and PDD Holdings, the parent company of Pinduoduo, another Chinese e-commerce giant specializing in low-cost items (they own the Temu site), is fifth equal with Apple, with $38 billion.

The ranking is completed by Samsung, third with 62 billion dollars, TSMC, the world’s largest semiconductor foundry, ninth with 24 billion dollars, and by… Stellantis.

The Franco-Italian-American automobile group born from the merger of PSA and Fiat Chrysler closes the top 10 with 21 billion dollars. The company has decided to return a significant amount of cash to its shareholders. In 2024, it plans to return at least 7.7 billion euros to its shareholders in the form of dividends or share buybacks.

The group also announced in June that it would increase the share of its results devoted to dividends in 2025. It will reach the upper end of a range going from 25% to 30% of its revenues against 25% during “recent years”. “The company will continue to use share buybacks and ordinary dividends to return excess cash to shareholders,” Stellantis also indicated.