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4 Top-Ranked Stocks With Solid Net Profit Margins to Enhance Returns
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Key Takeaways
ENVA, SNEX, SHIP and FLXS stocks were screened for margins, EPS growth and bullish analyst sentiment.
ENVA, SNEX, SHIP and FLXS have witnessed upward EPS estimate revisions recently.
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. Enova International, Inc. (ENVA - Free Report) , StoneX Group Inc. (SNEX - Free Report) , Seanergy Maritime Holdings Corporation (SHIP - Free Report) and Flexsteel Industries, Inc. (FLXS - 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. 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 that qualified the screening:
Enova International is a prominent financial technology company that provides online financial services to non-prime consumers and small businesses. The stock sports a Zacks Rank of 1 at present 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 Enova International’s 2026 earnings has been revised upward by 10.7% to $15.78 per share in the past 30 days. ENVA surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.66%.
StoneX Group provides financial services. Through its subsidiaries, the company offers execution, post-trade settlement, clearing and custody services. The stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for StoneX Group’s fiscal 2026 earnings has moved northward by 8.2% to $7.90 per share over the past 30 days. SNEX beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 3.83%.
Seanergy Maritime is a prominent pure-play Capesize shipowner that provides dry bulk marine transportation services through a modern fleet of Capesize vessels. The stock currently sports a Zacks Rank of 1 and has a VGM Score of B.
The Zacks Consensus Estimate for Seanergy Maritime’s 2025 earnings has been revised upward to $1.59 per share from $1.46 in the past 30 days. SHIP outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 76.43%.
Flexsteel Industries is engaged in the design, manufacture and sale of a broad line of quality upholstered furniture for residential, commercial and recreational vehicle seating use. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Flexsteel Industries’ fiscal 2026 earnings has moved upward by 15.5% to $4.09 per share. FLXS beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of approximately 53.1%.
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4 Top-Ranked Stocks With Solid Net Profit Margins to Enhance 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. Enova International, Inc. (ENVA - Free Report) , StoneX Group Inc. (SNEX - Free Report) , Seanergy Maritime Holdings Corporation (SHIP - Free Report) and Flexsteel Industries, Inc. (FLXS - 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. 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 that qualified the screening:
Enova International is a prominent financial technology company that provides online financial services to non-prime consumers and small businesses. The stock sports a Zacks Rank of 1 at present 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 Enova International’s 2026 earnings has been revised upward by 10.7% to $15.78 per share in the past 30 days. ENVA surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.66%.
StoneX Group provides financial services. Through its subsidiaries, the company offers execution, post-trade settlement, clearing and custody services. The stock sports a Zacks Rank #1 and has a VGM Score of A.
The Zacks Consensus Estimate for StoneX Group’s fiscal 2026 earnings has moved northward by 8.2% to $7.90 per share over the past 30 days. SNEX beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same on two occasions, the average surprise being 3.83%.
Seanergy Maritime is a prominent pure-play Capesize shipowner that provides dry bulk marine transportation services through a modern fleet of Capesize vessels. The stock currently sports a Zacks Rank of 1 and has a VGM Score of B.
The Zacks Consensus Estimate for Seanergy Maritime’s 2025 earnings has been revised upward to $1.59 per share from $1.46 in the past 30 days. SHIP outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 76.43%.
Flexsteel Industries is engaged in the design, manufacture and sale of a broad line of quality upholstered furniture for residential, commercial and recreational vehicle seating use. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Flexsteel Industries’ fiscal 2026 earnings has moved upward by 15.5% to $4.09 per share. FLXS beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of approximately 53.1%.