Tuesday, June 09, 2009 9:05:57 AM
8-10% Net Margin is excellent for EXPH.. and as you see, higher than both Fortune 500 and SP 500 average..
here's a good link, Entrepreneurial Finance By Steven Rogers (page 140)
http://books.google.com/books?id=6P9qAAZjFIsC&pg=PA140&lpg=PA140&dq=average+fortune+500++net+margins&source=bl&ots=g_GhApHMrw&sig=cwdyepFDQor-INeuh68pc4CGfeU&hl=en&ei=nCguSrdXoby0A6KTlbAK&sa=X&oi=book_result&ct=result&resnum=2
below are excerpts taken from other published articles..
1. The Business of IT (IT from the CFO's point of view)
Hank Marquis, Practice Leader, Business Service Management, Global Knowledge, Inc
Here's why: the average Fortune 500 company has a 6.7% net profit margin. This means that for every dollar spent, the company makes just $0.067 - that's just under 7 cents - in profit. Ask yourself how many dollars you have to earn to net $17,500,000 in profit (at 6.7% profit margin).
2. "If you look at Fortune 500 companies in many verticals, 3 to 6 % Profits after Taxes is a great number!"
3. According to Applegate's numbers, the after-tax operating profit margin for all of the companies in the S&P 500 was nearly 7%
4. In general, net margins of 5 percent or better are considered very good. According to Hussman Funds,
5. The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others.
6. Grantham also pays attention to profit margins. The long-term average net-profit margin for S&P 500 companies is 5.6%. Currently, Grantham thinks profit margins are way too high. As the recession deepens, he believes margins will fall much lower — back to their historical averages. That’s a negative for stocks. But because of the bear market, P/Es have fallen so far that he sees stocks as good buys now.
here's a good link, Entrepreneurial Finance By Steven Rogers (page 140)
http://books.google.com/books?id=6P9qAAZjFIsC&pg=PA140&lpg=PA140&dq=average+fortune+500++net+margins&source=bl&ots=g_GhApHMrw&sig=cwdyepFDQor-INeuh68pc4CGfeU&hl=en&ei=nCguSrdXoby0A6KTlbAK&sa=X&oi=book_result&ct=result&resnum=2
below are excerpts taken from other published articles..
1. The Business of IT (IT from the CFO's point of view)
Hank Marquis, Practice Leader, Business Service Management, Global Knowledge, Inc
Here's why: the average Fortune 500 company has a 6.7% net profit margin. This means that for every dollar spent, the company makes just $0.067 - that's just under 7 cents - in profit. Ask yourself how many dollars you have to earn to net $17,500,000 in profit (at 6.7% profit margin).
2. "If you look at Fortune 500 companies in many verticals, 3 to 6 % Profits after Taxes is a great number!"
3. According to Applegate's numbers, the after-tax operating profit margin for all of the companies in the S&P 500 was nearly 7%
4. In general, net margins of 5 percent or better are considered very good. According to Hussman Funds,
5. The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others.
6. Grantham also pays attention to profit margins. The long-term average net-profit margin for S&P 500 companies is 5.6%. Currently, Grantham thinks profit margins are way too high. As the recession deepens, he believes margins will fall much lower — back to their historical averages. That’s a negative for stocks. But because of the bear market, P/Es have fallen so far that he sees stocks as good buys now.

