Get a Load of the Profit Margin on These Companies

GuruFocus.com09-04

If a company has a fat profit margin, it's a good sign for two reasons. Customers want its goods or services enough to pay a hefty price. And the company is not letting expenses balloon. On the basis ...

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Customers want its goods or services enough to pay a hefty price. And the company is not letting expenses balloon.\nOn the basis ...</p>\n\n<a href=\"https://finance.yahoo.com/news/load-profit-margin-companies-170131674.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"UTMD","symbol_name":"犹他医疗产品","start_time":0,"source_url":"https://finance.yahoo.com/news/load-profit-margin-companies-170131674.html","article_id":"2464738380","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/QGejAL6baXKHLO4NSCuU0w--~B/aD00MTI7dz01NTA7YXBwaWQ9eXRhY2h5b24-/https://media.zenfs.com/en/us.finance.gurufocus/3641a89554ad31013f75c4322c67389a"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2464738380","pubTimestamp":1725382891,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"If a company has a fat profit margin, it's a good sign for two reasons. Customers want its goods or services enough to pay a hefty price. And the company is not letting expenses balloon.On the basis of their high profit margins, I recommend ON Semiconductor Corp. , Martin Marietta Materials Inc. , Devon Energy Corp. , T. Rowe Price Group Inc. and Snap-on Inc. .This is the 15th column I've written about companies with pleasingly plump profit margins. In 14 past years, my selections in this series have achieved an average one-year return of 17.50%. That beats the average for the Standard & Poor's 500 Total Return Index, which was 15.80% over the same period.GuruFocus has detected 3 Warning Sign with ON.Bear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future.An investment firm specializing in mutual funds and employee-benefit plans, T. Rowe Price  of Baltimore, Maryland, boasts a ne","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"UTMD":"犹他医疗产品","LU1162221912.USD":"FRANKLIN INCOME \"A\" (USD) ACC","IE00BZ199S13.USD":"BNY MELLON MOBILITY INNOVATION \"B\" (USD) ACC","ALTM":"Arcadium Lithium","SQQQ":"纳指三倍做空ETF","BK4588":"碎股","BK4512":"苹果概念","LU2237438978.USD":"Amundi Funds US Pioneer A2 (C) USD","LU0124384867.USD":"贝莱德新能源基金A2","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4135":"资产管理与托管银行","BK4548":"巴美列捷福持仓","MLM":"马丁-玛丽埃塔材料","QLD":"纳指两倍做多ETF","ON":"安森美半导体","TQQQ":"纳指三倍做多ETF","BK4213":"石油与天然气的勘探与生产","PSQ":"纳指反向ETF","SNA":"施耐宝","BK4516":"特朗普概念","LU1861219969.SGD":"Blackrock Future of Transport A2 SGD-H","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","BK4198":"医疗保健用品","BK4554":"元宇宙及AR概念","BK4187":"航天航空与国防","LU1861215975.USD":"贝莱德新一代科技基金 A2","BK4144":"石油与天然气的储存和运输","LU1244550221.USD":"FRANKLIN GLOBAL MULTI-ASSET  INCOME \"A\" (USDHEDGED) INC (M)","BK4141":"半导体产品","TROW":"普信集团","LU1244550577.SGD":"FTIF - Franklin Global Multi-Asset Income A (Mdis) SGD-H1","LMT":"洛克希德马丁","LU1861220033.SGD":"Blackrock Next Generation Technology A2 SGD-H","BK4585":"ETF&股票定投概念","BK4567":"ESG概念","SG9999001440.SGD":"United Global Dividend Equity Fund A SGD Dist","LU2298322129.HKD":"BGF SUSTAINABLE ENERGY \"A2\" (HKDHDG) ACC","LU1244550494.USD":"FRANKLIN GLOBAL MULTI-ASSET INCOME \"A\" (USDHEDGED) ACC","LU0348723411.USD":"ALLIANZ GLOBAL HI-TECH GROWTH \"A\" (USD) INC","LU1720051108.HKD":"ALLIANZ GLOBAL ARTIFICIAL INTELLIGENCE \"AT\" (HKD) ACC","BK4508":"社交媒体","LU1854103824.USD":"M&G (LUX) POSITIVE IMPACT \"A\" (USD) INC","LU2357305700.SGD":"Allianz Global Artificial Intelligence ET H2-SGD","DVN":"德文能源","QID":"纳指两倍做空ETF",".IXIC":"NASDAQ Composite"},"translate_title":"了解这些公司的利润率","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"ALTM":1,"UTMD":1,"TROW":1,"ON":1,"MLM":1,"LMT":1,"DVN":1,"SNA":0.9,".IXIC":0.8,"PSQ":0.6,"QID":0.6,"QLD":0.6,"SQQQ":0.6,"TQQQ":0.6,"MNQmain":0.6,"NQmain":0.6},"content_text":"If a company has a fat profit margin, it's a good sign for two reasons. Customers want its goods or services enough to pay a hefty price. And the company is not letting expenses balloon.\nOn the basis of their high profit margins, I recommend ON Semiconductor Corp. (NASDAQ:ON), Martin Marietta Materials Inc. (NYSE:MLM), Devon Energy Corp. (NYSE:DVN), T. Rowe Price Group Inc. and Snap-on Inc. (NYSE:SNA). \nThis is the 15th column I've written about companies with pleasingly plump profit margins. In 14 past years, my selections in this series have achieved an average one-year return of 17.50%. That beats the average for the Standard & Poor's 500 Total Return Index, which was 15.80% over the same period. \n\nWarning! GuruFocus has detected 3 Warning Sign with ON.\n\nBear in mind that my column results are hypothetical and shouldn't be confused with results I obtain for clients. Also, past performance doesn't predict the future.\nNow, here are five new high-margin selections.\nON Semiconductor\nSpecializing in semiconductor chips for cars, ON Semiconductor (NASDAQ:ON) boasts a 10-year revenue growth rate of more than 11%, and an earnings growth rate of more than 27%. It hit a bump last year, though, with both revenue and profits falling slightly. \nWas that just a bump, or a wall that the company hit? Analysts are divided on that question. Of 33 analysts covering the company, 19 call it a buy and 14 rate it a hold or underperform. \nI believe that the cars of the future will need even more chips than the cars of the present. And I like ON's net profit margin of nearly 25%. So I'm guessing that the recent slowdown was merely a bump. \nMartin Marietta\nThere were two companies named Martin Marietta (NYSE:MLM). One merged with Lockheed Corp. to form Lockheed Martin Corp. (NYSE:LMT), the largest U.S. defense contractor by revenue. The other, Martin Marietta Materials, is the one I'm recommending today.\nThe materials company, based in Raleigh, North Carolina, provides crushed stone, gravel, sand and cement. That may sound prosaic but the stock has doubled in the past five years and the company's after-tax margin is nearly 31%. \nThe recent increase in federal infrastructure spending has helped this company, and I expect the favorable effects will continue for the next few years.\nDevon Energy\nEnergy companies are said to be more oily or gassy depending on the mix of oil and gas they produce. Devon, based in Oklahoma City, Oklahoma, is relatively gassy. In the most recent quarter, its production included 29% natural gas and 28% natural-gas liquids. \nDevon appears to be putting together a fourth consecutive very profitable year, after posting losses in six of the nine years preceding. I find the stock, at 8 times earnings, quite attractive. The net margin lately has been above 22%. \nT. Rowe Price\nAn investment firm specializing in mutual funds and employee-benefit plans, T. Rowe Price (NASDAQ:TROW) of Baltimore, Maryland, boasts a net margin of more than 28%. In the past five years, the stock has been a dud, sitting today slightly below where it was five years ago.\nI think that financial stocks will benefit if the Federal Reserve eases interest rates over the next couple of years. Selling at less than 13 times earnings, the stock looks to me like a good bet. \nSnap-on\nBased in Kenosha, Wisconsin, Snap-on Inc. (NYSE:SNA) provides repair tools and software to auto shops. It works on a franchise system. Franchisees by a red-and-white truck from Snap-on, along with gear to fill it. Then they distribute it to gas stations and other auto-repair shops.\nThe franchisees make about $60,000 to $130,000 a year, according to third-party reports. Snap-on itself made a little over $1 billion in the past four quarters, on revenue of roughly $5 billion. \nSome people figure that the advent of electric cars will hurt the company, since electric cars have fewer parts than gasoline-powered cars. My view is that car repairers will need both kinds of tools for the next five years or more. \nLast year\nMy fat-margin stocks enjoyed a bigger lead over the S&P 500 before the past year. My picks in 2023 were a disaster.\nThey fell 7.50%, even as the S&P 500 rose 26.90% with dividends reinvested. None of my picks did especially well. The worst performers were Livent Corp. (now part of Arcadium Lithium PLC (NYSE:ALTM)) and Utah Medical Products Inc. (NASDAQ:UTMD), both down close to 24%. \nThe crummy performance was all the more disappointing because it followed a very good one in 2022, when my fat-margin selections returned 32.94%. \nJohn Dorfman is chairman of Dorfman Value Investments in Boston, Massachusetts. His firm or clients may own or trade the stocks discussed here. He can be reached at jdorfman@dorfmanvalue.com.This article first appeared on \nGuruFocus.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2464738380"}