In this article we will take a look at the 15 most profitable industries in the world in 2021. You can skip our detailed analysis of these beneficial industries, and go directly to the 5 Most Profitable Industries in the World in 2021.
With the pandemic raging on, pushing the world into economic distress, some industries are keeping the world’s economy going. In this article, we highlight the 15 most profitable industries in the world in 2021. Covid-19 has had some adverse effects on the global economy. With countries going into lockdowns and shutting down businesses, it is inevitable to anticipate that a period of economic depression is before us. Nevertheless, some industries have managed to keep their heads up high and stay optimistic even in these trying times.
Sometimes when things are falling apart, they may actually be falling into place. As countries begin to lift their lockdowns and businesses resume their standard operational procedures, we see that although the costs of providing countermeasures to coronavirus may be bothersome for many companies, only the strongest will survive. Yes, we will show you how surprising the fact is that in these times of economic recession, some of the most powerful industries managed to make profits and kept the world’s economy rolling. The tech industry reflected positivity the most.
The 37-year-old CEO of Facebook (NASDAQ: FB), Mark Zuckerberg, became a centa-billionaire with a net worth of $119.3 billion. Jeff Bezos, the CEO of Amazon (NASDAQ: AMZN), became the richest man globally with a net worth of $186.8 billion. Apart from tech giants, companies in the food and beverages industry such as PepsiCo (NASDAQ: PEP) have also shone brightly in this period of darkness. Our list only covers the most robust industries that have had the strength to bounce back after the blow that came with COVID-19. We should realize that some sectors, once mighty, could not become a part of this list, such as the tourism, airline, and hotel industries. International and even regional travel bans in some regions caused these industries to collapse, having several companies that belong to these industries declare bankruptcy. These very industries and many others like them will not be rising to their true potential any time soon until this pandemic is over or until there is a substantial decrease in the casualties.
Our Methodology
To compile this list, we looked at statistics presented in datasets by Aswath Damodaran, a professor of corporate finance and valuation at the Stern School of Business at New York University. This website contains credible information about industries in the form of datasets compiled, bifurcating industries according to niches, based on corporate finance and valuation metrics. We looked at three measures, gross profits, net income, and return on invested capital, to determine which industries would make it to our list of the 15 most profitable industries in the world in 2021. The gross profit is simply the difference between the revenue generated by the industry and the cost of goods that it sold. The net income is the revenue left after taking away all the expenses, taxes, and costs. The return on invested capital (ROIC) is the ratio of net income and capital invested. It helps determine how much an investor is benefitting from investing in an industry.
So without further ado, let’s take a look at the 15 most profitable industries in the world in 2021.
Most Profitable Industries in the World in 2021
15. Online Retail Industry
In our list of the 15 most profitable industries globally in 2021, the online retail industry ranks at number 15. With the ongoing pandemic, online sales have skyrocketed, contributing to a $288.8 billion gross profit of the online retail industry. The industry has capital returns at 11.19% and a net income of $45.7 billion. Companies such as Amazon.com Inc. (NASDAQ: AMZN) alone generated an online net revenue of $52.9 billion from online stores in the first quarter of 2021.
14. Food Processing Industry
Developing countries such as Pakistan and India have taken a toll since 2019 and have been in economic distress. Nevertheless, the food processing industries are what keep these countries going. Nestlé S.A. (OTC: NSRGY) showed a growth rate of 2.4% since 2019. The food processing industry made it to our list of the 15 most profitable industries in the world in 2021, with gross profits maxing at $390 billion, a 14.35% return on invested capital, and a net income of $81.2 billion. PepsiCo (NASDAQ: PEP) is another famous company that contributes to the gains made by the food processing industry in 2021.
Like TAKE-TWO INTERACTIVE SOFTWARE, INC Common Stock (NASDAQ: TTWO), Intel Corporation (NASDAQ: INTC), NVIDIA Corporation(NASDAQ: NVDA), Advanced Micro Devices, Inc. (NASDAQ: AMD), PayPal Holdings Inc. (NASDAQ: PYPL) and MasterCard Inc. (NYSE: MA), Pepsi’s business also thrived in the midst of the pandemic.
13. Soft Beverages Industry
We have been consumers of non-alcoholic beverages for a long time. The soft beverages industry boasts a return on invested capital of 20.19% and a gross profit of $115 billion. PepsiCo (NASDAQ: PEP) has reported an increase in net income from $1.77 billion to $1.85 billion, along with an 8.8% increase in revenue. The industry boasts a net income of $22.7 billion.
12. Real Estate Development
Being one of the most tangible assets one can own, property keeps the real estate development industries in business. This industry has generated a net income of $85.3 billion and a gross profit of $264.4 billion. The capital returns, however, are one of the lowest in our list at a mere 8.29%
11. Information Services
The world depends on data more than one may think, especially now in the digital era where data is perpetually collected, logged, and analyzed. The information services industry is one of the 15 most profitable industries in the world in 2020, encompassing a diverse range of companies. PayPal Holdings Inc. (NASDAQ: PYPL) and MasterCard Inc. (NYSE: MA) are two of the most renowned companies in this sector. The information services industry generated gross profits up to $108 billion, a net income of $29.5 billion, and a 23.40% return on invested capital.
Like TAKE-TWO INTERACTIVE SOFTWARE, INC Common Stock (NASDAQ: TTWO), Intel Corporation (NASDAQ: INTC), NVIDIA Corporation(NASDAQ: NVDA), Advanced Micro Devices, Inc. (NASDAQ: AMD), PepsiCo (NASDAQ: PEP) and Amazon.com Inc. (NASDAQ: AMZN), PayPal Holdings Inc. (NASDAQ: PYPL)’s business also thrived in the midst of the pandemic.
10. Semiconductor Industry
Semiconductors are small but essential components of electronic devices. The computer you are using contains semiconductors, so does your smartphone, and if you own an electric car, then yes, your vehicle contains them too. The semiconductor industry has always been popular, giving us more reason to include it in our list of the 15 most profitable industries in the world in 2021. Intel Corporation (NASDAQ: INTC), NVIDIA Corporation(NASDAQ: NVDA), and Advanced Micro Devices, Inc. (NASDAQ: AMD) are some of the big players in this sector. The semiconductor industry boasts its net income of $81.5 billion and a 19.36% return on capital investment. The gross profit generated values at $219.9 billion.
9. Life insurance
The insurance industry has been popular over the years, life insurance being the most popular of the vast array of insurance industries. This industry has made net income up to $86 billion and a gross profit of $452.6 billion. The return on capital, however, is relatively low, at 10.70%. Prudential Financial Inc. (NYSE: PRU) is a Fortune 500 company contributing to the life insurance industry.
8. Healthcare Support and Services
The waves are coming in and not in a good way. With the third wave of Covid-19 taking over the world, the need for healthcare support rises. Healthcare is a “need,” not a “want.” Medical treatment is expensive and extensively required by the entire population in these tragic times. As essential and fundamental as it is, the healthcare support and services industry has a net income of $53.8 billion and a 26.98% return on investment. It does not come as a surprise to see this industry make it to our list of the 15 most profitable industries in the world in 2021—the gross profit for healthcare services values at $320.5 billion.
7. Computer Services
Computer services have been, and always will be in demand. The computer service industry is growing at exponential rates. With the increase in demand for computer services, tech companies are bound to generate large profits, contributing to a net income of $41.5 billion and a return of 21.92% on capital. The gross profit for this industry is a whopping $209.7 billion. Amazon.com Inc. (NASDAQ: AMZN) provides cloud computing, and Apple Inc. (NASDAQ: AAPL) offers online services. We anticipate this industry to move up on our list in the future because the demand for computer services is growing each day.
Like TAKE-TWO INTERACTIVE SOFTWARE, INC Common Stock (NASDAQ: TTWO), Intel Corporation (NASDAQ: INTC), NVIDIA Corporation(NASDAQ: NVDA), Advanced Micro Devices, Inc. (NASDAQ: AMD), PayPal Holdings Inc. (NASDAQ: PYPL) and MasterCard Inc. (NYSE: MA), Apple’s business also thrived in the midst of the pandemic.
6. Software (Entertainment)
You will see another software industry in this list, indicating that the software industry is so huge that we had to classify it into two categories. The entertainment software industry primarily encompasses video-game companies, which we all know to be profitable. We have heard of the name Rockstar Games Inc, owned by TAKE-TWO INTERACTIVE SOFTWARE, INC Common Stock (NASDAQ: TTWO), and their rather popular grand theft auto franchise, which has sold over 145 million copies of GTA 5 just in 2021. The entertainment software industry has a net income of $83.5 billion and an 18.32% return on capital investment, making it to our list of the 15 most profitable industries in the world in 2021.
5. Household Products
Yes, household products may come cheap, but they come from an industry that belongs to one of the 15 most profitable industries in the world in 2021. Colgate-Palmolive Company (NYSE: CL), The Procter & Gamble Company (NYSE: PG), and L’Oréal S.A. (EPA: OR) are just a few of the many companies that contribute to the net profits and investment returns of the household products industry. For the year 2021, the household products industry has a net income of $40.6 billion and a capital return rate of 24.60%, which is quite decent. The gross profit stands strong at $239.6 billion.
4. Oil and Gas Industry
Though this is not an eco-friendly industry, it still earns more profits than many industries that care relatively more about the environment. Chevron Corporation (NYSE: CVX), Exxon Mobil Corporation (NYSE: XOM), and Shell (AMS: RDSA) are the names known to many, and these companies contribute to the oil and gas (integrated) industry’s net income of $31.3 billion and the highest gross profit seen in this list that values at $833 billion. Conversely, the return on capital investment is the lowest seen in the list, at 4.64%.
3. Drugs and Pharmaceuticals
The drug industry is notorious for high-priced products. If you look at some of your prescriptions (if you have any), you will realize how much money you are handing to this industry, which is making billions in profits, $95.8 billion to be exact. It is not surprising to see this industry in the top three of our list of the 15 most profitable industries in the world in 2021. The drugs and pharmaceuticals industry has attained a gross profit of $643.2 billion and a 17.06% return on capital.
2. Computer Peripherals
Now that working from home has become common practice for everyone, computers and their accessories have become more of a necessity than a luxury. This will go on until coronavirus does not leave us all alone. The computer peripherals industry is a growing industry, accumulating more and more profits as time passes. The net income for this industry currently rests at $96.4 billion with a 19.92% return on capital. The gross profit for the peripherals industry stands at $345.8 billion. Some of the renowned companies in this industry are Apple Inc. (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Hewlett Packard Enterprise Company (NYSE: HPQ), and Acer Inc. (TPE: 2353).
1. Software (System and Application)
As promised, here comes the other software industry at the top of our list of the 15 most profitable industries in the world in 2021. The industry gave us Microsoft’s Windows and Apple’s Macintosh operating systems. The industry made our lives easier by giving us applications for writing documents, surfing the internet, and attending meetings virtually. Microsoft is possibly the most famous company associated with the software systems and applications industry. This industry will continue to dominate with a net income of $81.3 billion and capital returns of 32.07%. The gross profit for the application software industry stands strong at $339.9 billion. The need for new software applications is ever-growing, as we humans want easier lives. Without these software applications, all electronic devices would be as good as rocks or overpriced paperweights.
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