Profit Margins
Profit Margins In Retreat....The Mathematics Of The Downside
Profit margins contracting. Assuming margins fall back to median historical levels, this implies a market decline of about 18%.
Focus On Profit Margins
While the current economic expansion has been below average in terms of growth, the profit expansion over this time frame has been explosive.
View From The North Country
Even though it is entering its sixth year, the Industrial Metals play is not over. It seems to be entering its third and last act, an act that could run for at least another 18 months.
View From The North Country
Doug Ramsey steps in as guest commentator in this month’s “View From The North Country” to highlight what we currently see as the bullish arguments for the stock market and contrast those with the bearish arguments.
S&P 500 Sector Profit Margins Update
Review of profit margins by broad sector show very little contraction since we last published this work a year ago. Margins have expanded in Energy, Materials, and Health Care sectors, while there has been contraction in Consumer Staples and Information Technology.
Health Care's Top 20 Stocks
Highlight on the Health Care sector: Relative Valuations, Top Twenty Components, P/E Ratios, PSR, and Gross Profit Margins.
Checking In On The Tech Top 20–Valuations Remain Reasonable
The twenty biggest Tech stocks were flat in April, but remain up 7% YTD on a median basis.
Revisiting Sector Profit Margins: Data Now Expanded Back The 1950s
On an aggregate basis, we see little room for further margin improvement, but there are select areas we believe may yet be poised for additional (slight/moderate) expansion.
Energy Sector Profits Have Never Been Better (1957 To Date)
After painstakingly reconstructing energy sector stock components back into the 1950s and obtaining sales and earnings data also back to the 1950s, we were able to produce a long term study of profit margins in the oil patch.
Energy Sector Profit Margins Have Never Been Better (1957 To Date)
With profit margins now at 9.85%, the Energy sector is now as good as it gets.
Higher Costs Starting To Pressure Margins
Looking at the last five quarters’ S&P 500 income statements.
Profit Margins At The Sector Level
An expanded discussion of profit margins broken out by broad sectors. Expect some expansion still in Materials and Energy, as well as possibly Tech. Contraction anticipated in Financials, Consumer Discretionary and Telecom.
Profit Margins At The Sector Level
Jim Floyd has begun analyzing the profit margins broken down by broad equity sectors. He also looks at some of the factors which may have a specific impact on the margins.
A Closer Look At Profit Margins
No matter how you cut it, we don’t expect to see much in the way of margin expansion. Further earnings growth will have to come from top line sales growth.
Profit Margins: It Don’t Get Any Better Than This
Estimated year end profit margins are expected to be at 7.4%, the highest level dating back to at least 1955.
Trying To Rationalize Today’s Stock Market Valuations
Bullish conclusions using today’s low inflation levels and today’s “low” bond yields are derived from very short-term, historical time horizons. Longer term studies do not support these conclusions.
Just How Good Will It Get?
Earnings and profit margins have soared since 1992. Operating earnings for the S&P Industrials are estimated at $40 here in 1995, and this estimate may prove to be conservative.
High Tech…No Wreck Yet
Fat profit margins are stimulating competition and capacity which will ultimately bring margins (and tech stocks) down. Technology fragmenting, but the end is not quite yet in sight.
Perception for the Professional
March 2026 Issue
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March 2026 Issue
