We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
4 Stocks With Robust Net Profit Margins to Enrich Your Portfolio
Read MoreHide Full Article
Key Takeaways
JBL, DAKT, MSGM and SHG stocks were screened for margins, EPS growth and bullish analyst sentiment.
JBL, DAKT, MSGM and SHG 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 shows a company's ability to convert sales into profit, offering insight into operational efficiency and management quality. Jabil Inc. (JBL - Free Report) , Daktronics, Inc. (DAKT - Free Report) , Motorsport Games Inc. (MSGM - Free Report) and Shinhan Financial Group Co., Inc. (SHG - 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 from the six stocks that qualified the screening:
Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, production, product management and aftermarket services to customers in the aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries. 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 Jabil’s fiscal 2027 earnings has moved upward by 6.1% to $17.61 per share over the past 30 days. JBL’s earnings outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.1%.
Daktronics is one of the world's largest suppliers of electronic scoreboards, computer-programmable displays, and large-screen video displays and control systems. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Daktronics’ fiscal 2027 earnings has moved upward by 3 cents to $1.24 per share over the past 60 days. DAKT’s earnings outpaced the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 2.8%.
Motorsport Games is a racing game developer, publisher and esports ecosystem provider of official motorsport racing series. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Motorsport Games’ 2026 earnings has moved upward by 30.4% to 30 cents per share over the past 60 days. MSGM’s earnings topped the Zacks Consensus Estimate in the last reported quarter by 850%.
Shinhan Financial Group is Korea's largest financial services company. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Shinhan Financial Group’s 2026 earnings has moved upward by 4.1% to $9.22 per share over the past seven days. SHG’s earnings beat the Zacks Consensus Estimate in the last reported quarter by 7.30%.
Image: Bigstock
4 Stocks With Robust Net Profit Margins to Enrich Your Portfolio
Key Takeaways
Investors seek companies that consistently generate profits. One of the best metrics to measure profitability is the net profit margin. This metric shows a company's ability to convert sales into profit, offering insight into operational efficiency and management quality. Jabil Inc. (JBL - Free Report) , Daktronics, Inc. (DAKT - Free Report) , Motorsport Games Inc. (MSGM - Free Report) and Shinhan Financial Group Co., Inc. (SHG - 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 from the six stocks that qualified the screening:
Jabil is one of the largest global suppliers of electronic manufacturing services. The company offers electronics design, production, product management and aftermarket services to customers in the aerospace, automotive, computing, consumer, defense, industrial, instrumentation, medical, networking, peripherals, storage and telecommunications industries. 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 Jabil’s fiscal 2027 earnings has moved upward by 6.1% to $17.61 per share over the past 30 days. JBL’s earnings outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 5.1%.
Daktronics is one of the world's largest suppliers of electronic scoreboards, computer-programmable displays, and large-screen video displays and control systems. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Daktronics’ fiscal 2027 earnings has moved upward by 3 cents to $1.24 per share over the past 60 days. DAKT’s earnings outpaced the Zacks Consensus Estimate thrice in the trailing four quarters while missing on one occasion, the average surprise being 2.8%.
Motorsport Games is a racing game developer, publisher and esports ecosystem provider of official motorsport racing series. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Motorsport Games’ 2026 earnings has moved upward by 30.4% to 30 cents per share over the past 60 days. MSGM’s earnings topped the Zacks Consensus Estimate in the last reported quarter by 850%.
Shinhan Financial Group is Korea's largest financial services company. The stock sports a Zacks Rank #1 and has a VGM Score of B.
The Zacks Consensus Estimate for Shinhan Financial Group’s 2026 earnings has moved upward by 4.1% to $9.22 per share over the past seven days. SHG’s earnings beat the Zacks Consensus Estimate in the last reported quarter by 7.30%.