Zacks
Zacks.com featured highlights Greenland Technologies, Great Lakes Dredge & Dock, Orion Group and Climb Global Solutions
Zacks Equity Research
7 min read

In This Article:

For Immediate Release

Chicago, IL – May 16, 2025 – The stocks in this week’s article are Greenland Technologies Holding Corp. GTEC, Great Lakes Dredge & Dock Corp. GLDD, Orion Group Holdings, Inc. ORN and Climb Global Solutions, Inc. CLMB.

4 Top-Ranked Stocks with Solid Net Profit Margins to Enhance Returns

Investors prefer to invest in businesses that reap profits on a regular basis. To gauge the extent of profits, there is no better metric than the net profit margin.

A higher net margin reflects a company’s efficiency in converting sales into actual profits. Greenland Technologies Holding Corp., Great Lakes Dredge & Dock Corp., Orion Group Holdings, Inc. and Climb Global Solutions, 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 not only attracts investors but also draws well-skilled employees who eventually enhance a business's 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 27 stocks that qualified the screening:

Terms and Privacy Policy
Your Privacy Choices
Utah Privacy Notice
More Info

Recommended Stories