One of the most important considerations for stocks is company profitability, but this is complicated by the many different ways to look at the earnings numbers. For ideas on how to start your search, we ran a screen.
We screened the semiconductor industry of the tech sector for stocks seeing impressive profitability compared to their industry peers, with higher gross, operating, and pretax margins than their industry averages.
Interactive Chart: Press Play to compare changes in market cap 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.
1. Analog Devices Inc. (ADI): Engages in the design, manufacture, and marketing of analog, mixed-signal, and digital signal processing integrated circuits used in industrial, communication, computer, and consumer applications. TTM gross margin at 69.7% vs. industry average at 59.24%. TTM operating margin at 34.37% vs. industry average at 23.08%.TTM pretax margin at 33.74% vs. industry average at 21.96%.
2. Altera Corp. (ALTR): Designs, manufactures, and markets programmable logic devices; structured application-specific integrated circuit devices; predefined design building blocks or intellectual-property cores; and associated development tools. TTM gross margin at 71.98% vs. industry average at 59.29%. TTM operating margin at 41.23% vs. industry average at 23.1%.TTM pretax margin at 41.12% vs. industry average at 21.98%.
3. CEVA Inc. (CEVA): And its subsidiaries engage in designing and licensing silicon intellectual property for the handsets, portable multimedia, and consumer electronics markets. TTM gross margin at 94.72% vs. industry average at 59.24%. TTM operating margin at 30.8% vs. industry average at 23.08%.TTM pretax margin at 35.64% vs. industry average at 21.96%.
4. Intel Corporation (INTC): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. TTM gross margin at 74.11% vs. industry average at 59.24%. TTM operating margin at 33.21% vs. industry average at 23.08%.TTM pretax margin at 32.93% vs. industry average at 21.96%.
5. KLA-Tencor Corporation (KLAC): Engages in the design, manufacture, and marketing of process control and yield management solutions for the semiconductor and related nanoelectronics industries. TTM gross margin at 61.96% vs. industry average at 59.24%. TTM operating margin at 34.28% vs. industry average at 23.08%.TTM pretax margin at 32.53% vs. industry average at 21.96%.
6. Maxim Integrated Products Inc. (MXIM): Designs, develops, manufactures, and markets a range of linear and mixed-signal integrated circuits worldwide. TTM gross margin at 68.95% vs. industry average at 59.24%. TTM operating margin at 25.87% vs. industry average at 23.08%.TTM pretax margin at 25.34% vs. industry average at 21.96%.
7. Xilinx Inc. (XLNX): Designs, develops, and markets programmable platforms in North America, the Asia Pacific, Europe, and Japan. TTM gross margin at 67.03% vs. industry average at 59.26%. TTM operating margin at 29.56% vs. industry average at 23.09%.TTM pretax margin at 27.56% vs. industry average at 21.96%.
*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.
