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A Trio of Stocks With a History of Operating Income Margin Growth

·3 min read

- By

When the operating income margin continues to expand, it means that the company is becoming more efficient in generating profits from its operating activities.

The operating income margin is a more effective measure than the net income margin when assessing whether the company is capable of generating income, as the metric excludes those items on which the company has no or limited control, but that could weigh on the net income notably in some years.


Thus, investors could be interested in the three stocks listed below, as their operating income margins have expanded in recent years.

T-Mobile US Inc

The first stock that investors may want to consider is T-Mobile US Inc (NASDAQ:TMUS), a Bellevue, Washington-based provider of mobile communications services in the United States, U.S. Virgin Islands and Puerto Rico.

The company saw its trailing 12-month operating income margin (10.31% as of the most recent full fiscal year) grow by 6.6% on average every year over the past five years.

A Trio of Stocks With a History of Operating Income Margin Growth
A Trio of Stocks With a History of Operating Income Margin Growth

The share price increased by 188.21% over the past five years to trade at $136.13 at close on Thursday for a market capitalization of $169.02 billion. T-Mobile US Inc does not pay dividends.

On Wall Street, the stock has a median recommendation rating of buy with an average target price of $173.79 per share.

Vanguard Group Inc dominates the group of top fund holders with 3.46% of shares outstanding. It is followed by BlackRock Inc. with 3.26% of shares outstanding and FMR LLC with 2.97% of shares outstanding.

Intercontinental Exchange Inc

The second stock that investors could be interested in is Intercontinental Exchange Inc (NYSE:ICE), an Atlanta, Georgia-based financial data and stock exchanges company.

The company saw its trailing 12-month operating income margin (38.06% as of the most recent full fiscal year) grow by 0.3% on average every year over the past five years.

A Trio of Stocks With a History of Operating Income Margin Growth
A Trio of Stocks With a History of Operating Income Margin Growth

The share price of $120.73 at close on Thursday has risen by 113.10% over the past five years for a market capitalization of $68.43 billion. Currently, Intercontinental Exchange Inc pays a quarterly cash dividend of 33 cents per common share, leading to a trailing 12-month dividend yield of 1.03% as of Sept. 2.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $137.67 per share.

Vanguard Group is the leader in the group of top fund holders of the company with 7.68% of shares outstanding, followed by BlackRock with 7.35% of shares outstanding and State Street Corp with 4.42% of shares outstanding.

Roku Inc

The third stock that investors could be interested in is Roku Inc (NASDAQ:ROKU), a Los Gatos, California-based TV streaming platform operator.

The company saw its trailing 12-month operating income margin (-1.14% as of the most recent full fiscal year) grow by 33.6% on average every year over the past five years.

A Trio of Stocks With a History of Operating Income Margin Growth
A Trio of Stocks With a History of Operating Income Margin Growth

The share price has risen by 1,355% over the past five years to trade at $346.49 at close on Thursday for a market capitalization of $45.52 billion. Currently, Roku Inc does not pay dividends.

On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $483.09 per share.

FMR LLC is the leader in the group of top fund holders with 6.31% of shares outstanding. It is followed by Vanguard Group with 5.92% of shares outstanding and BlackRock with 5.19% of shares outstanding.

Disclosure: I have no positions in any securities mentioned in this article.

This article first appeared on GuruFocus.