Zacks.com featured highlights include Griffon, Centrus Energy, Tactile Systems Technology and Copa Holdings
For Immediate Release
Chicago, IL – February 27, 2024 – Stocks in this week’s article are Griffon Corp. GFF, Centrus Energy Corp. LEU, Tactile Systems Technology, Inc. TCMD and Copa Holdings, S.A. CPA.
4 Stocks with Solid Net Profit Margin to Boost Portfolio Returns
The primary purpose of a business is to generate profits that can be reinvested in expansion or utilized for rewarding shareholders. Net profit margin is an effective tool to measure the profits reaped by a business.
A higher net margin underlines a company's efficiency in translating sales into actual profits. Moreover, this metric gives insight into how well a company is run and the headwinds weighing on it. Griffon Corp., Centrus Energy Corp., Tactile Systems Technology, Inc. and Copa Holdings, S.A. 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, 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 not only attracts investors but also draws well-skilled employees who eventually enhance the value of a business.
Moreover, a higher net profit margin compared with its peers provides a 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 have picked four stocks — Griffon, Centrus Energy, Tactile Systems Technology and Copa Holdings — from the 24 stocks that qualified the screening.
Griffon is a diversified management and holding company conducting business through wholly-owned subsidiaries. Through its subsidiaries, the company provides consumer and professional, and home and building products in the United States and internationally. The stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for Griffon's fiscal 2024 earnings has moved 3.9% north in the past 30 days and currently stands at $4.80 per share. GFF surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 42%.
Centrus Energy is a supplier of enriched uranium fuel for commercial nuclear power plants. At present, the stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Centrus Energy's current-year earnings has moved up by 8.8% to $2.71 per share in the past 30 days. LEU surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 136.9%.
Tactile Systems Technology is a medical technology company, which develops medical devices for the treatment of chronic diseases at home. The company's product pipeline consists of Flexitouch System, the Entré System and the ACTitouch System. At present, the stock carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Tactile Systems Technology's 2024 earnings has moved up by 33.3% to 56 cents per share in the past seven days. TCMD surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 796.5%.
Copa Holdings, through its main subsidiaries — Copa Airlines and Copa Colombia — offers airline passenger and cargo services. On a daily basis, the company currently operates approximately 204 scheduled flights and flies to 69 destinations covering 29 countries in North, Central, South America and the Caribbean from its Panama City hub. At present, the stock carries a Zacks Rank #2 and has a VGM Score of A.
The Zacks Consensus Estimate for Copa Holdings' current-year earnings has moved up to $16.27 per share from $15.82 30 days ago. CPA surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 18%.
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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/2231414/4-stocks-with-solid-net-profit-margin-to-boost-portfolio-returns
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Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
Tactile Systems Technology, Inc. (TCMD) : Free Stock Analysis Report
Centrus Energy Corp. (LEU) : Free Stock Analysis Report
Griffon Corporation (GFF) : Free Stock Analysis Report
