For Immediate Release
Chicago, IL – July 17, 2019 - Stocks in this week’s article are Kamada Ltd. KMDA, SunCoke Energy, Inc. SXC, Great Lakes Dredge & Dock Corp. GLDD, Herc Holdings Inc. HRI and SYNNEX Corporation SNX.
Tap These Stocks that Flaunt Impressive Net Profit Margins
Businesses earning big bucks are pursued by all and sundry. In order to estimate the profit limit of a company, there is no better measure than the net profit margin.
Net profit margin signifies the financial standing of an organization. It is indicative of the company’s ability to manage its resources, making it the paramount metric to assess its profitability.
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 in a company operations and 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 that eventually add to the value of the business.
Moreover, a higher net profit margin compared to its peers gives the company 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 own 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.
Moreover, the difference in accounting treatment of various items — especially non-cash expenses like depreciation and stock-based compensation — makes comparison a daunting task.
Further, 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.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/442861/tap-these-6-stocks-that-flaunt-impressive-net-profit-margin
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Herc Holdings Inc. (HRI) : Free Stock Analysis Report
Great Lakes Dredge & Dock Corporation (GLDD) : Free Stock Analysis Report
SunCoke Energy, Inc. (SXC) : Free Stock Analysis Report
SYNNEX Corporation (SNX) : Free Stock Analysis Report
Kamada Ltd. (KMDA) : Free Stock Analysis Report
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