Profitability Analysis of Best Five S&P 500 Components; Net Profit Margin in Review – YHOO, CME, PSA, ICE, AIG

  on Jan 04,2013 Posted in Finance ,Investment Ideas
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Every company is most worried about its profitability and profitability ratios are the one of the most frequently used tools which are used to determine the corporation’s bottom line and its return to its investors.

Profit margin shows the percentage of revenue that a corporation keeps as profit after accounting for fixed and variable outlays. Profit margin is gauged by dividing net income by revenue.

The profit margin is generally used for internal comparisons, as acceptable profit margins vary between industries. Net profit margin calculated by net profit divided by net revenues, often showed as a percentage. This ratio shows how effective a corporation is at cost control. In this article we will discuss best five companies of S&P 500 with higher net profit margin ratio.

Yahoo! Inc (NASDAQ:YHOO) offered net profit margin of 66.94% and mark the best position among S&P 500 components according to our criteria. The company has return on assets ratio of 19.02%, which is relatively strong among stocks. The Sunnyvale, California based company has the market capitalization of 23.39 billion while its P/E ratio of 6.00. Institutional ownership of the company was 73% while its 1.18 billion shares were outstanding.

CME Group Inc (NASDAQ:CME) has market capitalization of 17.19 billion and offered 6.93% Return on equity. The company’s institutional ownership was 71% and its price to earnings ratio was 11.59. PEG ratio, which measures growth also, was 1.02. Net profit margin of the company was 49.67% while gross profit margin was 96.87%. Shares of the company were lagging behind SMA 20 with -1.18% while SMA 50 with -4.10%.

Public Storage (NYSE:PSA) has market capitalization of 24.98 billion while its Price to earnings ratio was 40.87. The company offered earning per share of 3.56 and its 171.65 million shares were outstanding while the 78% shares of the company were owned by institutional investors. The company has return on equity ratio of 11.89% while ROA was 9.55%. Net profit margin of the company was 48.57%. The company earned $610.67 million on sales of $1.81 billion.

IntercontinentalExchange Inc (NYSE:ICE) has return on equity ratio of 16.76% while its return on investment ratio was 13.32%. The company offered 1.47% as return on assets. The company has market capitalization of $9.23 billion while its EPS was 7.48. Net profit margin was 40.93% while operating profit margin was 60.69%. Stock volatility for the week was booked as 1.73% while for the month was 2.10%.

Finally let’s have a quick look on American International Group, Inc (NYSE:AIG). The blue chip financial stock has market capitalization of 53.41 billion while offered P/E ratio of 2.51. The Beta factor, which is used as a measure of a company’s volatility in relation to the market, was 3.45 while the PEG ratio of the stock was 0.15. Net profit margin was 38.83%. The company has ROE ratio of 28.82% while ROA value remained 5.01%.

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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