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The following is a list of the most profitable large cap stocks, based on average gross and net profit margins over the last five years.

To compile this list, we started with a universe of the 120 largest companies by market cap. We then narrowed the list by only focusing on those stocks that have higher gross and net profit margins compared with industry averages.

We're not going to go into detailed analysis for each company. The goal here is to give you a starting point for your own analysis.

(Profitability data and industry comps sourced from Reuters, short float and performance data sourced from Finviz.)

Interactive Chart: Press Play to compare changes in market cap for the top six names mentioned below. Note: The numbers on top of items represent the forward P/E ratio, if available.





The list has been sorted by the average gross margin over the last five years.

  1. Visa, Inc. (NYSE:V): Business Services Industry. Market cap of $60.77B. 5-year average gross margin at 79.63% vs. industry average at 51.4%. 5-year average net profit margin at 19.87% vs. industry average at 15.92%. Short float at 3.28%, which implies a short ratio of 2.48 days. The stock has lost -16.12% over the last year.
  2. Oracle Corp. (NYSE:ORCL): Application Software Industry. Market cap of $156.37B. 5-year average gross margin at 78.1% vs. industry average at 67.4%. 5-year average net profit margin at 23.75% vs. industry average at 17.25%. Short float at 0.83%, which implies a short ratio of 1.11 days. The stock has gained 25.81% over the last year.
  3. China Telecom Corp. Ltd. (NYSE:CHA): Telecom Service. Market cap of $85.94B. 5-year average gross margin at 77.41% vs. industry average at 53.98%. 5-year average net profit margin at 10.31% vs. industry average at 7.3%. Short float at 0.06%, which implies a short ratio of 5.44 days. The stock has gained 31.95% over the last year.
  4. Novo Nordisk A/S (NYSE:NVO): Drug Manufacturer. Market cap of $77.9B. 5-year average gross margin at 76.73% vs. industry average at 56.61%. 5-year average net profit margin at 19.55% vs. industry average at 13.39%. Short float at 0.07%, which implies a short ratio of 1.62 days. The stock has gained 72.42% over the last year.
  5. GlaxoSmithKline plc (NYSE:GSK): Drug Manufacturer. Market cap of $101.36B. 5-year average gross margin at 76.62% vs. industry average at 48.49%. 5-year average net profit margin at 21.61% vs. industry average at 13.37%. Short float at 0.16%, which implies a short ratio of 1.92 days. The stock has lost -1.34% over the last year.
  6. BHP Billiton Ltd. (NYSE:BHP): Industrial Metals & Minerals Industry. Market cap of $253.37B. 5-year average gross margin at 75.9% vs. industry average at 42.22%. 5-year average net profit margin at 23.83% vs. industry average at 16.79%. Short float at 0.2%, which implies a short ratio of 1.88 days. The stock has gained 16.46% over the last year.
  7. Alcon Inc. (NYSE:ACL): Medical Instruments & Supplies Industry. Market cap of $49.58B. 5-year average gross margin at 75.49% vs. industry average at 50.41%. 5-year average net profit margin at 28.63% vs. industry average at 10.22%. Short float at 1.85%, which implies a short ratio of 1.12 days. The stock has gained 8.71% over the last year.
  8. Merck & Co. Inc. (NYSE:MRK): Drug Manufacturer. Market cap of $114.45B. 5-year average gross margin at 73.45% vs. industry average at 48.49%. 5-year average net profit margin at 27.82% vs. industry average at 13.37%. Short float at 0.79%, which implies a short ratio of 1.79 days. The stock has lost -0.43% over the last year.
  9. Novartis AG (NYSE:NVS): Drug Manufacturer. Market cap of $132.09B. 5-year average gross margin at 72.55% vs. industry average at 48.49%. 5-year average net profit margin at 18.73% vs. industry average at 13.37%. Short float at 1.34%, which implies a short ratio of 6.13 days. The stock has gained 12.85% over the last year.
  10. British American Tobacco plc (NYSEMKT:BTI): Cigarettes Industry. Market cap of $76.11B. 5-year average gross margin at 71.73% vs. industry average at 45.2%. 5-year average net profit margin at 21.37% vs. industry average at 14.51%. Short float at 0.01%, which implies a short ratio of 0.59 days. The stock has gained 21.97% over the last year.
  11. Johnson & Johnson (NYSE:JNJ): Drug Manufacturer. Market cap of $171.64B. 5-year average gross margin at 71.17% vs. industry average at 48.49%. 5-year average net profit margin at 19.58% vs. industry average at 13.37%. Short float at 0.98%, which implies a short ratio of 2.65 days. The stock has lost -0.41% over the last year.
  12. Union Pacific Corporation (NYSE:UNP): Railroads Industry. Market cap of $48.37B. 5-year average gross margin at 70.34% vs. industry average at 19.79%. 5-year average net profit margin at 11.4% vs. industry average at 7.94%. Short float at 0.95%, which implies a short ratio of 1.67 days. The stock has gained 47.96% over the last year.
  13. Telefonica, S.A. (NYSE:TEF): Telecom Services. Market cap of $104.45B. 5-year average gross margin at 69.75% vs. industry average at 53.98%. 5-year average net profit margin at 13.22% vs. industry average at 7.3%. Short float at 0.67%, which implies a short ratio of 1.21 days. The stock has lost -7.85% over the last year.
  14. QUALCOMM Incorporated (NASDAQ:QCOM): Communication Equipment Industry. Market cap of $84.67B. 5-year average gross margin at 69.41% vs. industry average at 31.53%. 5-year average net profit margin at 28.14% vs. industry average at 5.52%. Short float at 1.62%, which implies a short ratio of 1.78 days. The stock has gained 9.5% over the last year.
  15. Occidental Petroleum Corporation (NYSE:OXY): Independent Oil & Gas Industry. Market cap of $79.23B. 5-year average gross margin at 65.92% vs. industry average at 35.88%. 5-year average net profit margin at 25.16% vs. industry average at 12.71%. Short float at 1.29%, which implies a short ratio of 2.43 days. The stock has gained 24.66% over the last year.
  16. Companhia de Bebidas Das Americas (ABV): Brewers Industry. Market cap of $91.04B. 5-year average gross margin at 65.75% vs. industry average at 41.33%. 5-year average net profit margin at 21.61% vs. industry average at 4.68%. Short float at 0.64%, which implies a short ratio of 1.91 days. The stock has gained 46.04% over the last year.
  17. Diageo plc (NYSE:DEO): Wineries & Distillers Industry. Market cap of $47.45B. 5-year average gross margin at 65.18% vs. industry average at 45.02%. 5-year average net profit margin at 20.06% vs. industry average at 4.49%. Short float at 0.06%, which implies a short ratio of 0.66 days. The stock has gained 13.75% over the last year.
  18. Canadian Natural Resources Limited (NYSE:CNQ): Independent Oil & Gas Industry. Market cap of $46.28B. 5-year average gross margin at 64.77% vs. industry average at 43.76%. 5-year average net profit margin at 22.92% vs. industry average at 11.18%. Short float at 0.31%, which implies a short ratio of 1.2 days. The stock has gained 19.97% over the last year.
  19. The Coca-Cola Company (NYSE:KO): oft Drinks Industry. Market cap of $146.38B. 5-year average gross margin at 64.58% vs. industry average at 48.94%. 5-year average net profit margin at 20.69% vs. industry average at 5.78%. Short float at 0.95%, which implies a short ratio of 2.22 days. The stock has gained 14.02% over the last year.
Source: Top 19 Most Profitable Large Cap Stocks