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Grab These 4 Stocks With Solid Net Profit Margins to Boost Returns
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Key Takeaways
GLDD, INFU, TILE and CENX stocks were screened for margins, EPS growth and bullish analyst sentiment.
All have witnessed upward EPS estimate revisions recently, reflecting confidence in their outlooks.
All picks hold high Zacks Ranks and strong VGM Scores, supporting their upside potential.
Investors seek companies that consistently generate profits. One of the best metrics to measure profitability is the net profit margin. This metric highlights a company's ability to convert sales into actual profits, providing insights into operational efficiency and management quality. Great Lakes Dredge & Dock Corporation (GLDD - Free Report) , InfuSystem Holdings, Inc. (INFU - Free Report) , Interface, Inc. (TILE - Free Report) and Century Aluminum Company (CENX - Free Report) boast solid net profit margins.
Net Profit Margin = Net profit/Sales * 100
Net profit represents the amount retained after all expenses, including costs, interest, depreciation and taxes. A strong net profit margin indicates effective cost control and operational strength, which are crucial for rewarding stakeholders, and attracting investors and talented employees. Moreover, a higher net profit margin compared to 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, this metric varies across industries, making direct comparisons challenging. While it is vital for traditional industries, it might be less relevant for technology companies.
Differences in accounting practices, especially with regard to non-cash expenses like depreciation and stock-based compensation, further complicate comparisons. Additionally, companies that rely heavily on debt may show lower net profits due to high interest expenses, limiting the metric's effectiveness in evaluating performance.
The Winning Strategy
A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.
Apart from these, we have added a few criteria to ensure maximum returns from this strategy.
Screening Parameters
Net Margin 12 months – Most Recent (%) greater than equal to 0: High net profit margin indicates solid profitability.
Percentage Change in EPS F(0)/(F-1) greater than equal to 0: It indicates earnings growth.
Average Broker Rating (1-5) equal to 1: A rating of #1 indicates brokers’ extreme bullishness on the stock.
Zacks Rank less than or equal to 2: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally perform better than their peers in all types of market environments.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Here we discuss our four picks from the 31 stocks that qualified the screen:
Great Lakes Dredge & Dock is the largest provider of dredging services in the United States, conducting business to maintain and deepen shipping channels, reclaim land from the ocean and renourish storm-damaged coastline. The stock sports a Zacks Rank #1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Great Lakes Dredge & Dock’s 2025 earnings has been revised upward by 6 cents to $1.02 per share over the past 30 days. GLDD surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 45.3%.
InfuSystem is a rapidly growing healthcare services company that provides state-of-the-art electronic continuous ambulatory infusion pumps, supplies and support to oncology practices and clinics throughout the United States. Currently, the stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for InfuSystem’s 2025 earnings has been revised upward to 26 cents per share from 6 cents 30 days ago. INFU beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 79.2%.
Century Aluminum is engaged in the production of primary aluminum in the United States and Iceland. The stock currently sports a Zacks Rank of 1 and has a VGM Score of A.
The Zacks Consensus Estimate for Century Aluminum’s fiscal 2025 earnings has been revised upward by 15.7% to $2.06 per share in the past 30 days. CENX surpassed the Zacks Consensus Estimate twice in the trailing four quarters and missed the same on two occasions, the average surprise being 15.4%.
Interface is the world's largest manufacturer of modular carpets, which it markets under the Interface and FLOR brands. The stock currently carries a Zacks Rank of 1 and has a VGM Score of B.
The Zacks Consensus Estimate for Interface’s 2025 earnings has been revised upward to $1.70 per share from $1.58 in the past 30 days. TILE outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 33.5%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Grab These 4 Stocks With Solid Net Profit Margins to Boost Returns
Key Takeaways
Investors seek companies that consistently generate profits. One of the best metrics to measure profitability is the net profit margin. This metric highlights a company's ability to convert sales into actual profits, providing insights into operational efficiency and management quality. Great Lakes Dredge & Dock Corporation (GLDD - Free Report) , InfuSystem Holdings, Inc. (INFU - Free Report) , Interface, Inc. (TILE - Free Report) and Century Aluminum Company (CENX - Free Report) boast solid net profit margins.
Net Profit Margin = Net profit/Sales * 100
Net profit represents the amount retained after all expenses, including costs, interest, depreciation and taxes. A strong net profit margin indicates effective cost control and operational strength, which are crucial for rewarding stakeholders, and attracting investors and talented employees. Moreover, a higher net profit margin compared to 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, this metric varies across industries, making direct comparisons challenging. While it is vital for traditional industries, it might be less relevant for technology companies.
Differences in accounting practices, especially with regard to non-cash expenses like depreciation and stock-based compensation, further complicate comparisons. Additionally, companies that rely heavily on debt may show lower net profits due to high interest expenses, limiting the metric's effectiveness in evaluating performance.
The Winning Strategy
A healthy net profit margin and solid EPS growth are the two most sought-after elements in a business model.
Apart from these, we have added a few criteria to ensure maximum returns from this strategy.
Screening Parameters
Net Margin 12 months – Most Recent (%) greater than equal to 0: High net profit margin indicates solid profitability.
Percentage Change in EPS F(0)/(F-1) greater than equal to 0: It indicates earnings growth.
Average Broker Rating (1-5) equal to 1: A rating of #1 indicates brokers’ extreme bullishness on the stock.
Zacks Rank less than or equal to 2: Stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally perform better than their peers in all types of market environments.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Here we discuss our four picks from the 31 stocks that qualified the screen:
Great Lakes Dredge & Dock is the largest provider of dredging services in the United States, conducting business to maintain and deepen shipping channels, reclaim land from the ocean and renourish storm-damaged coastline. The stock sports a Zacks Rank #1 and has a VGM Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Great Lakes Dredge & Dock’s 2025 earnings has been revised upward by 6 cents to $1.02 per share over the past 30 days. GLDD surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 45.3%.
InfuSystem is a rapidly growing healthcare services company that provides state-of-the-art electronic continuous ambulatory infusion pumps, supplies and support to oncology practices and clinics throughout the United States. Currently, the stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for InfuSystem’s 2025 earnings has been revised upward to 26 cents per share from 6 cents 30 days ago. INFU beat the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 79.2%.
Century Aluminum is engaged in the production of primary aluminum in the United States and Iceland. The stock currently sports a Zacks Rank of 1 and has a VGM Score of A.
The Zacks Consensus Estimate for Century Aluminum’s fiscal 2025 earnings has been revised upward by 15.7% to $2.06 per share in the past 30 days. CENX surpassed the Zacks Consensus Estimate twice in the trailing four quarters and missed the same on two occasions, the average surprise being 15.4%.
Interface is the world's largest manufacturer of modular carpets, which it markets under the Interface and FLOR brands. The stock currently carries a Zacks Rank of 1 and has a VGM Score of B.
The Zacks Consensus Estimate for Interface’s 2025 earnings has been revised upward to $1.70 per share from $1.58 in the past 30 days. TILE outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 33.5%.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks' portfolios and strategies are available at: https://www.zacks.com/performance/.