When financial analysts talk about the biggest or most valuable publicly-traded companies in the world, they mean the companies that have the largest market capitalization. Called market cap for short, this is the number you get when you take the price of a company's stock and multiply it by the number of shares of stock it has issued. It represents the total valuation of the company.

When stocks are grouped together into an index, like the S&P 500 (Index: SPX), they are often weighted within the index according to their market cap. For example, the biggest company in the world in July 2025 is Nvidia (Nasdaq: NVDA) has a market cap of over $4 trillion by itself. When combined with the 502 other companies that make up the S&P 500 index, it alone accounts for about 7% of the entire value of the index. As a result, even relatively moderate changes in the price of NVDA's stock will have a significant influence over how the value of the index changes from day-to-day.

We were curious to see if there's a relationship between a company's market cap and its dividend yield. It can be argued there should be because whenever dividends are paid, it directly shrinks a company's market capitalization by the total amount of dividends paid. The total amount of dividends paid is equal to the dividend per share multiplied by the number of shares of stock the comapny has issued. When you divide those total dividends paid by the company's market cap, the result is called the dividend yield. Because the number of shares issued by a company appears in both the numerator and denominator of that math, the dividend yield can be more simply described as result of the dividends per share divided by the company's share price.

We tapped FinViz' data visualization tools for all the companies that make up the S&P 500 index to produce the following chart plotting the market cap for each company against its dividend yield.
 

Looking at this chart, it seems there is an inverse relationship between the companies with the largest market capitalizatons and their dividend yield. Which is to say that as market cap rises, dividend yields get smaller.

That's somewhat misleading because what the chart is really showing is that the megacap companies tend to have some of the lowest dividend yields. Since there aren't that many companies that qualify as megacap firms, there's not much of a statistical basis to support that impression.

To see what we mean, we regenerated the chart to exclude any companies whose market caps exceeded $200 billion, which excludes megacap firms according to FinViz' definition. Here's the visual result:
 

Excluding the megacaps from the visualization has the effect of eliminating the appearance of a significant inverse relationship between market cap and dividend yield. While there are some high dividend yield outliers in the upper left hand corner of the chart, we recognize the firms, Dow Chemical (NYSE: DOW) and LyondellBasell Industries (NYSE: LYB) are both chemical industry firms whose stock prices have recently plunged because of distress within their industry and factors that apply uniquely for each firm. Their dividend yields can be considered to be high in this snapshot from 22 July 2025 because they haven't yet adjusted their dividends to compensate for the negative changes in their near-term prospects for profitability. [Update: Since we took this snapshot, Dow Chemical slashed its dividend.]

On the whole, we find little evidence to support an inverse relationship between market cap and dividend yield for the S&P 500's stocks. This assessment generally agrees with what others have found in looking at other stock markets.

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