For Immediate Release
Chicago, IL – July 2, 2019 - Stocks in this week’s article are North American Construction Group Ltd. NOA, Great Lakes Dredge & Dock Corp. GLDD, Malibu Boats, Inc. MBUU, Xcel Brands Inc. XELB and SkyWest, Inc. SKYW.
Top Stocks with Impressive Net Profit Margins
The primary motive of investors is to earn maximum returns from his stakes. Thus, they are always on the lookout for companies, which are minting money in heaps.
Net profit margin is the most effective way to measure a company’s profitability. A proper analysis of the same shows how well a company is run and the headwinds dogging it.
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/436393/6-top-stocks-with-impressive-net-profit-margin
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SkyWest, Inc. (SKYW) : Free Stock Analysis Report
Great Lakes Dredge & Dock Corporation (GLDD) : Free Stock Analysis Report
Malibu Boats, Inc. (MBUU) : Free Stock Analysis Report
North American Construction Group Ltd. (NOA) : Free Stock Analysis Report
Xcel Brands, Inc (XELB) : Free Stock Analysis Report
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