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Buy These 4 Stocks With Solid Net Profit Margin to Boost Returns
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Key Takeaways
RELY, MG, ENVA and SNEX show strong net margins and upward EPS revisions for the current fiscal.
All four stocks have a Zacks Rank of 1 or 2 and a VGM Score of A or B, indicating solid upside potential.
Each company has an impressive track record of beating earnings estimates.
The primary purpose of a business is to generate profits that can be reinvested in expansion or distributed to reward shareholders. The net profit margin is an effective tool for measuring the profits a business reaps.
A higher net margin underlines a company’s efficiency in translating sales into actual profits. Moreover, this metric offers insight into how well a company is run and the headwinds weighing on it. Remitly Global, Inc. (RELY - Free Report) , Mistras Group, Inc. (MG - Free Report) , Enova International, Inc. (ENVA - Free Report) and StoneX Group Inc. (SNEX - Free Report) 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.
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.
Let us discuss the abovementioned four stocks out of the 16 stocks that qualified the screening.
Remitly Global is a mobile-first provider of remittances and financial services for immigrants. The stock currently sports a Zacks Rank of 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 Remitly Global’s 2026 earnings has been revised upward by a penny to 51 cents per share over the past seven days. RELY beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 391.7%.
Mistras Group is a global provider of technology-enabled, non-destructive testing solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. The stock currently sports a Zacks Rank of 1 and has a VGM Score of A.
The Zacks Consensus Estimate for Mistras Group’s 2026 earnings has been revised upward to $1.05 per share from 99 cents in the past 30 days. MG outperformed the Zacks Consensus Estimate thrice in the trailing four quarters, while missing the same on one occasion, the average surprise being 1.9%.
Enova International is a prominent financial technology company that provides online financial services to non-prime consumers and small businesses. The stock carries a Zacks Rank of 2 at present and has a VGM Score of A.
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 60 days. ENVA surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.7%.
StoneX Group provides financial services. Through its subsidiaries, the company offers execution, post-trade settlement, clearing and custody services. The stock carries a Zacks Rank #2 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 60 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%.
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Buy These 4 Stocks With Solid Net Profit Margin to Boost Returns
Key Takeaways
The primary purpose of a business is to generate profits that can be reinvested in expansion or distributed to reward shareholders. The net profit margin is an effective tool for measuring the profits a business reaps.
A higher net margin underlines a company’s efficiency in translating sales into actual profits. Moreover, this metric offers insight into how well a company is run and the headwinds weighing on it. Remitly Global, Inc. (RELY - Free Report) , Mistras Group, Inc. (MG - Free Report) , Enova International, Inc. (ENVA - Free Report) and StoneX Group Inc. (SNEX - Free Report) 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.
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.
Let us discuss the abovementioned four stocks out of the 16 stocks that qualified the screening.
Remitly Global is a mobile-first provider of remittances and financial services for immigrants. The stock currently sports a Zacks Rank of 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 Remitly Global’s 2026 earnings has been revised upward by a penny to 51 cents per share over the past seven days. RELY beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 391.7%.
Mistras Group is a global provider of technology-enabled, non-destructive testing solutions used to evaluate the structural integrity of critical energy, industrial and public infrastructure. The stock currently sports a Zacks Rank of 1 and has a VGM Score of A.
The Zacks Consensus Estimate for Mistras Group’s 2026 earnings has been revised upward to $1.05 per share from 99 cents in the past 30 days. MG outperformed the Zacks Consensus Estimate thrice in the trailing four quarters, while missing the same on one occasion, the average surprise being 1.9%.
Enova International is a prominent financial technology company that provides online financial services to non-prime consumers and small businesses. The stock carries a Zacks Rank of 2 at present and has a VGM Score of A.
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 60 days. ENVA surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 8.7%.
StoneX Group provides financial services. Through its subsidiaries, the company offers execution, post-trade settlement, clearing and custody services. The stock carries a Zacks Rank #2 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 60 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%.