Yahoo Finance Zacks.com featured highlights H&E Equipment Services, Barrett Business Services, StoneX and Dycom
For Immediate Release
Chicago, IL – April 17, 2024 – Stocks in this week’s article are H&E Equipment Services, Inc. HEES, Barrett Business Services, Inc. BBSI, StoneX Group Inc. SNEX and Dycom Industries Inc. DY.
Grab These 4 Solid Net Profit Margin Stocks for Strong Returns
Investors eye businesses that generate profits on a regular basis. In order to gauge the extent of profits, there is no better metric than net profit margin.
A higher net margin underlines a company’s efficiency in translating sales into actual profits. Moreover, this metric lends an insight into how well a company is run and the headwinds weighing on it. H&E Equipment Services, Inc., Barrett Business Services, Inc., StoneX Group Inc. and Dycom Industries Inc. 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, the 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 attracts investors and draws well-skilled employees, who eventually enhance business value.
Moreover, a higher net profit margin compared with its peers provides the 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.
Here we discuss our four picks from the 21 stocks that qualified the screen:
H&E Equipment is one of the largest integrated equipment services companies in the United States, with full-service facilities throughout the Intermountain, Southwest, Gulf Coast & Southeast regions of the United States. The stock sports a Zacks Rank of 1 at present and has a VGM Score of A.
The Zacks Consensus Estimate for H&E Equipment’s 2024 earnings has been revised upward by 15 cents to $5.02 per share in the past 60 days. H&E Equipment surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 17.2%.
Barrett Business Services provides light industrial, clerical and technical employees to a wide range of businesses through staff leasing, contract staffing, site management and temporary staffing arrangements. The stock has a Zacks Rank of 2 at present and a VGM Score of A.
The Zacks Consensus Estimate for Barrett Business Services’ 2024 earnings has been revised upward by 11 cents to $7.78 per share in the past 60 days. BBSI surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 77.7%.
StoneX Group provides financial services. The company, through its subsidiaries, offers execution, post-trade settlement, clearing and custody services. The stock carries a Zacks Rank #2 at present and has a VGM Score of A.
The Zacks Consensus Estimate of $7.61 per share for StoneX Group’s fiscal 2024 earnings has moved 20 cents north in the past seven days. SNEX surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 15.9%.
Dycom Industries is a specialty contracting firm operating in the telecom industry. The company provides diverse services such as engineering, construction, maintenance and installation services for the cable and telephone companies. The stock carries a Zacks Rank of 2 at present and has a VGM Score of A.
The Zacks Consensus Estimate for Dycom Industries’ fiscal 2025 earnings has been revised upward by 19 cents to $7.13 per share in the past 30 days. DY surpassed the Zacks Consensus Estimate thrice in the trailing four quarters while missing the same on one occasion, the average surprise being 53.9%.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2255818/grab-these-4-solid-net-profit-margin-stocks-for-strong-returns
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Dycom Industries, Inc. (DY) : Free Stock Analysis Report
Barrett Business Services, Inc. (BBSI) : Free Stock Analysis Report
H&E Equipment Services, Inc. (HEES) : Free Stock Analysis Report
StoneX Group Inc. (SNEX) : Free Stock Analysis Report
