20 Large-Cap Stocks With Impressive Profitability

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 |  Includes: AET, AON, AZO, CB, CNI, CPB, DFS, ESV, FAST, GR, HMC, HSY, K, L, MON, ORLY, PAYX, PPL, PRU, SPGI
by: Kapitall

Gauging a company's profitability can be difficult because of the many options available - one interesting idea is to compare a company's profit margins to its industry averages. Companies with higher margins are taking a greater percentage of sales as profits, and they have tighter control over their cost structure.

We ran a screen on large-cap stocks with high profitability, beating their industry averages on gross, operating, or pretax margins.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these companies have strong profitability? Use this list as a starting point for your own analysis.

List sorted by difference between gross margin and industry.

1. Prudential Financial, Inc. (NYSE:PRU): Offers various financial products and services in the United States, Asia, Europe, and Latin America. Market cap of $22.50B. TTM gross margin at 26.76% vs. industry gross margin at 14.25%. TTM operating margin at 12.00% vs. industry operating margin at 11.38%. TTM pretax margin at 10.09% vs. industry pretax margin at 10.08%. This is a risky stock that is significantly more volatile than the overall market (beta = 2.32). It's been a rough couple of days for the stock, losing 7.83% over the last week.

2. Loews Corporation (NYSE:L): Operates primarily as a commercial property and casualty insurance company in the United States. Market cap of $14.79B. TTM gross margin at 22.73% vs. industry gross margin at 14.26%. TTM operating margin at 22.73% vs. industry operating margin at 11.39%. TTM pretax margin at 18.77% vs. industry pretax margin at 10.08%. The stock has lost 2.31% over the last year.

3. Paychex Inc. (NASDAQ:PAYX): Provides payroll, human resource, and benefits outsourcing solutions for small-to medium-sized businesses in the United States and Germany. Market cap of $10.60B. TTM gross margin at 73.30% vs. industry gross margin at 48.50%. TTM operating margin at 38.29% vs. industry operating margin at 26.68%. TTM pretax margin at 38.57% vs. industry pretax margin at 26.65%. The stock has gained 0.65% over the last year.

4. Monsanto Co. (NYSE:MON): Provides agricultural products for farmers in the United States and internationally. Market cap of $36.26B. TTM gross margin at 56.62% vs. industry gross margin at 37.79%. TTM operating margin at 21.19% vs. industry operating margin at 17.43%. TTM pretax margin at 20.08% vs. industry pretax margin at 16.42%. It's been a rough couple of days for the stock, losing 5.59% over the last week.

5. Aon Corporation (NYSE:AON): Provides risk management, insurance and reinsurance brokerage, and human resource consulting and outsourcing services in the United States and internationally. Market cap of $14.57B. TTM gross margin at 21.02% vs. industry gross margin at 14.26%. TTM operating margin at 16.00% vs. industry operating margin at 11.39%. TTM pretax margin at 12.14% vs. industry pretax margin at 10.08%. The stock has gained 2.6% over the last year.

6. The McGraw-Hill Companies, Inc. (MHP): Provides various information services for financial, educational, and business information markets worldwide. Market cap of $12.40B. TTM gross margin at 61.84% vs. industry gross margin at 42.38%. TTM operating margin at 23.45% vs. industry operating margin at 18.75%. TTM pretax margin at 22.02% vs. industry pretax margin at 14.93%. The stock has gained 19.03% over the last year.

7. Fastenal Company (NASDAQ:FAST): Engages as a wholesaler and retailer of industrial and construction supplies. Market cap of $11.89B. TTM gross margin at 53.68% vs. industry gross margin at 37.48%. TTM operating margin at 20.47% vs. industry operating margin at 13.44%. TTM pretax margin at 20.49% vs. industry pretax margin at 12.91%. The stock is a short squeeze candidate, with a short float at 9.59% (equivalent to 9.58 days of average volume). The stock has gained 38.98% over the last year.

8. Ensco plc (NYSE:ESV): Provides offshore contract drilling services to the oil and gas industry. Market cap of $10.89B. TTM gross margin at 49.51% vs. industry gross margin at 34.72%. TTM operating margin at 29.63% vs. industry operating margin at 18.15%. TTM pretax margin at 26.75% vs. industry pretax margin at 16.10%. It's been a rough couple of days for the stock, losing 5.43% over the last week.

9. The Chubb Corporation (NYSE:CB): Provides property and casualty insurance to businesses and individuals. Market cap of $18.67B. TTM gross margin at 20.15% vs. industry gross margin at 14.25%. TTM operating margin at 18.01% vs. industry operating margin at 11.38%. TTM pretax margin at 18.01% vs. industry pretax margin at 10.08%. The stock has gained 16.04% over the last year.

10. AutoZone Inc. (NYSE:AZO): Operates as a specialty retailer and distributor of automotive replacement parts and accessories. Market cap of $12.75B. TTM gross margin at 53.57% vs. industry gross margin at 37.92%. TTM operating margin at 18.64% vs. industry operating margin at 10.00%. TTM pretax margin at 16.54% vs. industry pretax margin at 9.34%. The stock has gained 23.53% over the last year.

11. Honda Motor Co., Ltd. (NYSE:HMC): Engages in the development, manufacture, and distribution of motorcycles, automobiles, and power products primarily in North America, Europe, and Asia. Market cap of $53.31B. TTM gross margin at 32.58% vs. industry gross margin at 23.14%. TTM operating margin at 3.67% vs. industry operating margin at 3.44%. TTM pretax margin at 5.37% vs. industry pretax margin at 4.82%. It's been a rough couple of days for the stock, losing 7.74% over the last week.

12. Aetna Inc. (NYSE:AET): Operates as a diversified health care benefits company in the United States. Market cap of $14.23B. TTM gross margin at 29.65% vs. industry gross margin at 21.10%. TTM operating margin at 9.68% vs. industry operating margin at 8.39%. TTM pretax margin at 8.25% vs. industry pretax margin at 6.74%. Might be undervalued at current levels, with a PEG ratio at 0.76, and P/FCF ratio at 6.44. It's been a rough couple of days for the stock, losing 5.83% over the last week.

13. Hershey Co. (NYSE:HSY): Engages in manufacturing, marketing, selling, and distributing various chocolate and confectionery products, pantry items, and gum and mint refreshment products worldwide. Market cap of $13.25B. TTM gross margin at 46.01% vs. industry gross margin at 33.28%. TTM operating margin at 17.78% vs. industry operating margin at 12.13%. TTM pretax margin at 15.93% vs. industry pretax margin at 9.56%. The stock has gained 26.54% over the last year.

14. Goodrich Corp. (NYSE:GR): Supplies aerospace components, systems, and services primarily in the United States, Canada, Europe, and the Asia Pacific. Market cap of $15.37B. TTM gross margin at 35.24% vs. industry gross margin at 25.75%. TTM operating margin at 15.80% vs. industry operating margin at 11.93%. TTM pretax margin at 12.77% vs. industry pretax margin at 6.61%. The stock has gained 44.59% over the last year.

15. O'Reilly Automotive Inc. (NASDAQ:ORLY): Engages in the retail of automotive aftermarket parts, tools, supplies, equipment, and accessories in the United States. Market cap of $10.08B. TTM gross margin at 51.56% vs. industry gross margin at 37.93%. TTM operating margin at 14.44% vs. industry operating margin at 10.02%. TTM pretax margin at 13.80% vs. industry pretax margin at 9.36%. The stock has gained 26.72% over the last year.

16. Discover Financial Services (NYSE:DFS): Operates as a credit card issuer and electronic payment services company primarily in the United States. Market cap of $13.09B. TTM gross margin at 45.97% vs. industry gross margin at 33.95%. TTM operating margin at 44.92% vs. industry operating margin at 31.95%. TTM pretax margin at 39.32% vs. industry pretax margin at 24.46%. The stock has gained 25.57% over the last year.

17. Kellogg Company (NYSE:K): Manufactures and markets ready-to-eat cereal and convenience food products primarily in North America, Europe, Latin America, and the Asia Pacific. Market cap of $17.49B. TTM gross margin at 44.70% vs. industry gross margin at 33.23%. TTM operating margin at 15.20% vs. industry operating margin at 12.09%. TTM pretax margin at 12.66% vs. industry pretax margin at 9.53%. The stock has lost 1.58% over the last year.

18. PPL Corporation (NYSE:PPL): Generates and sells electricity; and delivers natural gas to approximately 5.3 million utility customers primarily in the northeastern and northwestern U.S.. Market cap of $16.56B. TTM gross margin at 36.24% vs. industry gross margin at 27.37%. TTM operating margin at 27.79% vs. industry operating margin at 18.61%. TTM pretax margin at 18.59% vs. industry pretax margin at 14.12%. The stock has gained 19.14% over the last year.

19. Campbell Soup Co. (NYSE:CPB): Engages in the manufacture and marketing of branded convenience food products worldwide. Market cap of $10.29B. TTM gross margin at 43.19% vs. industry gross margin at 33.27%. TTM operating margin at 17.22% vs. industry operating margin at 12.12%. TTM pretax margin at 14.82% vs. industry pretax margin at 9.55%. The stock is a short squeeze candidate, with a short float at 8.16% (equivalent to 6.14 days of average volume). The stock has lost 3.96% over the last year.

20. Canadian National Railway Company (NYSE:CNI): Engages in the rail and related transportation business in North America. Market cap of $32.53B. TTM gross margin at 46.82% vs. industry gross margin at 36.14%. TTM operating margin at 36.87% vs. industry operating margin at 26.19%. TTM pretax margin at 37.43% vs. industry pretax margin at 23.41%. It's been a rough couple of days for the stock, losing 6.11% over the last week.

*Profitability data sourced from Fidelity, all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.