Operating Profit Margin Recap of Top Five Industrial Goods Stocks – FAST, JOY, SWHC, COL, DHR

  on Jan 10,2013 Posted in Finance ,Investment Ideas
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Profit margin shows the percentage of revenue that a firm keeps as profit after accounting for fixed and variable outlays. Profit margin is measured by dividing net income by revenue.

The profit margin is mostly used for internal evaluations, as acceptable profit margins level vary with industries.

Generally, narrow profit margins show higher volatile earnings. For firms with higher fixed expenses, wide profit margins lower the risk that a drop in sales will cause a net profit loss.

On the other hand, operating profit margin shows the proportion of revenue a firm keeps after paying the variable costs of production. Operating profit margin is an important indicator of efficiency and profitability.

In this article we will discuss best five industrial goods stocks with market volume over two million and shown best operating profit margin in this sector.

Fastenal Company (NASDAQ:FAST) offered 26.64% return on equity while the company has 22.92% value in Return on Assets. The Winona, Minnesota based company has market capitalization of 14.09 billion while its P/E ratio of 34.50. Institutional ownership of the company was 78% while its 296.32 million shares were outstanding. Net profit margin of Fastenal was 13.31% while operating profit margin was 21.35%.

Joy Global Inc (NYSE:JOY) has market capitalization of 7.11 billion. The company’s institutional investors own 90% stake and its price to earnings ratio was 9.35. PEG ratio, which measures growth also, was 0.82. Net profit margin of JOY was 13.55% while operating profit margin was 20.71%. In the liquidity analysis, current ratio was recorded as 1.77 while quick ratio was 0.98. Shares of the company were moving ahead of SMA 50 with 12.12% and head off SMA 200 with 12.29%.

Smith & Wesson Holding Corporation (NASDAQ:SWHC) has market capitalization of 580.40 million while its price to earnings (P/E) ratio was 9.92. SWHC offered EPS of 0.88 and its 66.26 million shares were outstanding while the 70% stock was owned by institutional investors. The Springfield, Massachusetts based company has return on equity ratio of 45.92% while return on assets ratio was 20.88%.

Rockwell Collins, Inc (NYSE:COL) has return on equity ratio of 43.78% while its return on investment ratio was 15.70%. The Cedar Rapids, Iowa based company offered 11.38% as return on assets. The company has market capitalization of $8.30 billion while its EPS was 4.15. Net profit margin of the company was 12.89% while operating profit margin was 18.13%. Rockwell Collins will report quarterly results on Jan 18 before market open.

Finally let’s have a quick look on Danaher Corporation (NYSE:DHR) profitability ratios. The company has market capitalization of 39.95 billion while offered P/E ratio of 18.39. The Beta factor, which is used as a measure of a company’s volatility in relation to the market, was 0.97 while the PEG ratio of the stock was 1.38. The company has ROE ratio of 12.62% while ROA value remained 7.18%. Net profit margin of company was 12.40% while operating profit margin was 17.12%.

Disclosure: The views and opinions expressed in this article are exclusively those of the authors who have no stake in any stocks mentioned, and hold no plan to acquire any stake within the next 5 days.



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