Professional services companies make for a robust addition to an investment portfolio, but there’s a problem that many retail investors run into when trying to select the best professional services company to invest in: What happens when the company isn’t publicly traded?
No matter what kind of consulting is being offered — whether it be the management, legal, recruiting, or financial industry — it can sometimes be difficult to tell whether or not the company is publicly traded or if it plans to be soon.
Take Deloitte Touche Tohmatsu Limited, for example. Commonly referred to as Deloitte, this professional services company has a network of offices located in more than 150 countries and territories across the planet. But is the company publicly traded? If no, will it ever be publicly traded? And if not, what are some alternatives to Deloitte?
Is Deloitte Publicly Traded?
Unfortunately for retail investors and traders alike, Deloitte is not a publicly traded company. It is, however, the third-largest privately owned company in the United States — with $50.2 billion in global revenue for the 2021 fiscal year, it’s clear to see why this enormous multinational professional services network is so enticing to potential investors.
It’s worth noting that, even if Deloitte wanted to go public, the company would run into a couple of major hurdles. For one, the partner structure of Deloitte would make it difficult to go public.
There’s also the fact that stock market regulations for companies with structures like Deloitte state that only the most qualified individuals can be in possession of a portion of the company — this would make public trading quite difficult, if not outright impossible.
Is Deloitte A Fortune 500 Company?
Despite its impressive annual revenues, Deloitte is not a Fortune 500 company.
The company’s financials are not the problem here — after all, if Deloitte was ranked on the Fortune 500, it would fall somewhere around the 62 mark. This is a major feat, no doubt: Not only would Deloitte be in the top 100, the company would be in the top 20% of the Fortune 500, as well.
Is Deloitte A Big 4?
The Big 4, an umbrella term used to describe the four biggest accounting firms in the United States according to revenue, remains one of the most elusive and exclusive groups in all of American business. That’s why it’s so significant that Deloitte is one of them alongside
- Ernst & Young,
- PricewaterhouseCoopers, and
- Klynveld Peat Marwick Goerdeler.
The Big 4 are responsible for auditing a vast majority of the S&P 500’s financial statements. Beyond this, the Big 4 also provides these S&P 500 companies with consulting services, valuations, market research, legal advisory services, and assurance, among several other useful financial services.
Are Big 4 Accounting Firms Publicly Traded?
Of all the Big 4, none is publicly traded. Because accounting firms are — more often than not — partnerships owned by senior-level employees, it makes it difficult for companies like the Big 4 to make it onto the stock exchange.
Nothing is impossible, though — if Deloitte or any of the other Big 4 felt like going public, the company could structure the company to meet the rules and regulations to do so.
Of course, this would go against the Big 4’s mission to increase the annual income of its partners instead of long-term wealth for potential shareholders.
Why Don’t The Big 4 Go Public?
When all is said and done, these difficult regulations and the risk of losing out on increasing the partners’ wealth is undoubtedly the biggest things standing in the way of the Big 4 going public.
Think of it this way: The Big 4 don’t go public because these companies are not capital intensive businesses. Instead, these companies get access to capital through partners’ capital contributions.
At the end of the day, it seems the Big 4 values the privacy of its partners more than growing the personal wealth of potential shareholders.
Is Deloitte Listed On the New York Stock Exchange?
Deloitte is not listed on the New York Stock Exchange at this time.
This has everything to do with what’s been discussed above: As a private company with close to 200,000 independent professionals around the world, it would be quite hard for Deloitte to meet the many regulatory needs a company must abide by in order to be publicly listed on the New York Stock Exchange.
For now, Deloitte and the rest of the Big 4 remain private and have no plans to go public.
Who Are Deloitte’s Clients?
Given the company’s status as auditor to some of the biggest names in the S&P 500, Deloitte has some truly enormous clients:
- Boeing, a major government contractor and top airline manufacturer with a market capitalization of over $120 billion.
- Microsoft, the iconic computer software developer and manufacturer with a market cap of more than $2.3 trillion.
- Starbucks, one of the world’s most recognizable coffee brands with a market cap of nearly $123 billion.
- Morgan Stanley, a global financial institution and investment bank with a market cap of over $185 billion.
When Will Deloitte IPO?
Because of the difficult process Deloitte would have to go through and the major restructuring the company would need to do in order to go public, retail investors and traders should not expect Deloitte to go public with an initial public offering anytime soon (if ever).
However, on the flip side, Deloitte can actually help clients with the IPO process — if any one of Deloitte’s clients wished to go public on the stock exchange, the company can provide guidance on accounting for the initial public offering, run the client through the SEC’s requirements for going public, and help with any other financial matters in the months and weeks leading up to an IPO.
Alternatives To Deloitte Stock
While Deloitte and the Big 4 are not publicly traded stocks that investors can get a piece of just yet, there are a handful of alternatives to Deloitte stock including:
Accenture (ACN)
Accenture plc is a multinational company that provides professional services such as information technology and consulting to 91 of the Fortune Global 100 companies and around 75% of the Fortune Global 500 companies.
A part of the Fortune Global 500 itself, Accenture saw more than $50.5 billion in revenue for 2021 — an almost identical number to Deloitte’s $50.2 billion for the same fiscal year.
With a market cap of $240 billion and a price per share of over $365, Accenture is a great alternative to investing in nonexistent Deloitte stock.
Booz Allen Hamilton (BAH)
Booz Allen Hamilton Inc., a subsidiary of Booz Allen Hamilton Holding Corporation, is an information technology and management consulting firm based in the United States.
Known for providing analysis and engineering services to both private and public organizations and nonprofits around the globe, Booz Allen Hamilton saw an annual revenue of $7.8 billion in 2021 — a much smaller number than the ones reported by Deloitte or Accenture, but nothing to brush off by any means.
With a market cap of $11.5 billion and a price per share of over $85, Booz Allen Hamilton provides much of the same professional services at a fraction of the share price.
Marsh & McLennan (MMC)
., also known simply as Marsh McLennan, is a worldwide professional services firm that provides clients with risk and talent management and consulting, insurance (and reinsurance) brokering, and investment advisem*nt.
For the 2020 fiscal year, Marsh McLennan saw an annual revenue of over $17 billion — a nice middle ground between Accenture and Booz Allen Hamilton.
Marsh McLennan’s market cap currently sits at nearly $83 billion, making it a solid investment option for investors.
Huron Consulting (HURN)
What makes Huron Consulting Group — or, as it’s more commonly known as, Huron — different from these other alternatives is the industries Huron focuses on. Instead of being an umbrella of sorts for global companies, Huron works exclusively with the commercial, higher education, healthcare, and life science industries.
There’s no doubt Huron, with a market cap of only $1 billion and a price per share of just under $50, is one of the smallest and most affordable Deloitte alternatives, but this isn’t a bad thing.
If anything, it’s a huge positive for investors who have less to work with but still want in on the action.
FTI Consulting (FCN)
Like Huron Consulting, FTI Consulting is another smaller management consulting company that retail investors and traders can easily afford to invest in.
What’s more, despite its lower annual revenue ($2.4 billion for 2020) and market cap ($5.1 billion), FTI Consulting is still one of the largest management and financial consulting firms in the world.
This means that FTI is sort of like the best of both worlds: You get the status and the trustworthiness of one of the Big 4 firms, but you get the affordability of one of the smaller alternatives.
The Bottom Line: Is Deloitte Listed On The Stock Exchange?
As you can see, Deloitte is not listed on the stock exchange and doesn’t have any intention to be anytime soon. However, this isn’t the end of the road for retail investors and traders hoping to add professional services companies to their portfolios.
There are several promising alternatives to Deloitte and the Big 4, each with its own particular set of distinctive features that have the potential to bring In major returns.
Accenture, Booz Allen Hamilton, Marsh McLennan, Huron, FTI Consulting… no matter which alternative you pick, a successful professional services company is never a bad addition to a stock portfolio.
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