Zacks.com featured highlights include Arcos Dorados, Navigator Holdings, Veritiv and Delta Air Lines
For Immediate Release
Chicago, IL – July 31, 2023 – Stocks in this week’s article are Arcos Dorados Holdings Inc. ARCO, Navigator Holdings Ltd. NVGS, Veritiv Corp. VRTV and Delta Air Lines, Inc. DAL.
4 Solid Net Profit Margin Stocks to Boost Portfolio Returns
Investors eye businesses that generate profits on a regular basis. In order to gauge the extent of profits, there is no better metric than net profit margin.
A higher net margin underlines a company's efficiency in translating sales into actual profits. Moreover, this metric lends insight into how well a company is run and the headwinds weighing on it. Arcos Dorados Holdings Inc., Navigator Holdings Ltd., Veritiv Corp. and Delta Air Lines, Inc. boast solid net profit margins.
Net Profit Margin = Net profit/Sales * 100.
In simple terms, net profit is the amount a company retains after deducting all costs, interest, depreciation, taxes and other expenses. In fact, the net profit margin can turn out to be a potent point of reference to gauge the strength of a company's operations and its cost-control measures.
Also, higher net profit is essential for rewarding stakeholders. Further, strength in the metric attracts investors and draws well-skilled employees, who eventually enhance business value.
Moreover, a higher net profit margin compared with its peers provides the company with a competitive edge.
Pros and Cons
Net profit margin helps investors gain clarity on a company's business model in terms of pricing policy, cost structure and manufacturing efficiency. Hence, a strong net profit margin is preferred by all classes of investors.
However, net profit margin as an investment criterion has its share of pitfalls. The metric varies widely from industry to industry. While net income is a key metric for investment measurement in traditional industries, it is not that important for technology companies.
In addition, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.
Furthermore, for companies preferring to grow with debt instead of equity funding, higher interest expenses usually weigh on net profit. In such cases, the measure is rendered ineffective while analyzing a company's performance.
Here we discuss our four picks from the 25 stocks that qualified the screen:
Arcos Dorados operates as a franchisee of McDonald's, with its operations divided in Brazil, the North Latin America division; South Latin America and the Caribbean division. It also runs quick-service restaurants in Latin America and the Caribbean. The stock sports a Zacks Rank of 1 at present and has a VGM Score of A.
The Zacks Consensus Estimate for Arcos Dorados' 2023 earnings has been revised upward by 4 cents to 76 cents per share in the past seven days. ARCO surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 23.5%.
Navigator Holdings provides international seaborne transportation and regional distribution services related to liquefied petroleum gas, petrochemical gases and ammonia for energy companies, industrial users and commodity traders. It currently flaunts a Zacks Rank of 1 and has a VGM Score of B.
The Zacks Consensus Estimate for Navigator Holdings' 2023 earnings has been increased by 6 cents to $1.16 per share in the past 30 days. NVGS surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average negative surprise being 16.2%.
Veritiv engages in offering North American business-to-business distribution solutions. It provides packaging, print and print management, publishing, supply chain, facility and logistics solutions that span the entire lifecycle of core business operations. The company currently carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for VRTV's 2023 earnings has been revised upward to $20.25 per share from $20.20 in the past 30 days. Veritiv surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 14.3%.
Delta Air Lines is one of the four carriers that controls the majority of the U.S. aviation market (the carriers account for more than 60% of the domestic market share). It has hubs and market presence in Amsterdam, London-Heathrow, Mexico City, Paris-Charles de Gaulle and Seoul-Incheon. As of Dec 31, 2022, Delta Air Lines' fleet included roughly 1,250 aircraft. The stock carries a Zacks Rank of 2 at present and has a VGM Score of A.
The Zacks Consensus Estimate for Delta Air Lines' 2023 earnings has been revised upward by 4 cents to $6.67 per share in the past seven days. DAL surpassed the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 2.1%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2129295/4-solid-net-profit-margin-stocks-to-boost-portfolio-returns
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Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Arcos Dorados Holdings Inc. (ARCO) : Free Stock Analysis Report
Veritiv Corporation (VRTV) : Free Stock Analysis Report
Navigator Holdings Ltd. (NVGS) : Free Stock Analysis Report
