Highest Profit Margins

Q: What is a profit margin?

Profit margin is the percentage of revenue remaining after all expenses, taxes, and costs are deducted. A company with $100 million in revenue and $30 million in net income has a 30% profit margin. There are several types: gross margin (revenue minus cost of goods sold), operating margin (after operating expenses), and net margin (after everything including taxes and interest). This list uses net profit margin, the most comprehensive measure.

Q: What is a good profit margin?

Average profit margins vary significantly by industry. Software companies average 20-30%, pharmaceutical companies 15-25%, while retail and restaurants typically operate at 3-8%. A margin above 25% — the threshold for this list — places a company among the most profitable in any sector. What matters more than the absolute level is the trend: expanding margins suggest improving business quality, while declining margins may signal competitive pressure.

Q: What sectors have the highest profit margins?

Software, semiconductors, and pharmaceuticals consistently have the highest profit margins. Software companies benefit from near-zero marginal costs — selling one more license costs almost nothing. Semiconductor designers like Nvidia and Broadcom have margins above 50%. Pharmaceutical companies enjoy patent-protected pricing power. Financial services, especially asset management, also produces high margins. Capital-light business models generally produce higher margins than asset-heavy industries.

Q: Why do high-margin companies make good investments?

High margins indicate pricing power and competitive advantages that protect against competition and economic downturns. Companies with fat margins have a buffer — even if revenue dips, they remain profitable. They generate more free cash flow per dollar of revenue, funding dividends, buybacks, and R&D without debt. High-margin companies also tend to have higher returns on equity, meaning they create more value for shareholders per dollar invested in the business.

Q: What is an economic moat?

An economic moat is a durable competitive advantage that protects a company's profits from competitors, similar to a castle's moat. Types include brand power (Apple, Coca-Cola), network effects (Visa, Meta), switching costs (Microsoft, Adobe), cost advantages (Walmart), and intellectual property (pharmaceutical patents). Companies with wide moats tend to maintain high profit margins for years or decades. The concept was popularized by Warren Buffett as central to his investment philosophy.

Q: Can profit margins be misleading?

Yes. One-time events can temporarily inflate or depress margins — asset sales, tax benefits, or restructuring charges can distort the picture. Some companies show high net margins but low operating margins because of investment income or tax advantages rather than strong business operations. Cyclical companies may show peak margins at the top of a cycle that are unsustainable. Always look at multi-year margin trends rather than a single period.

Q: What is the difference between gross margin and net margin?

Gross margin measures profitability after subtracting only the direct costs of producing goods or services (cost of goods sold). Net margin subtracts everything — operating expenses, interest, taxes, and other costs. Gross margin shows the core profitability of the product itself, while net margin shows overall company profitability. A company with high gross margins but low net margins may be overspending on sales, marketing, or R&D, which could be either a problem or a growth investment.

Cash machines: companies turning over 25% of revenue into net profit. A sign of pricing power, brand moats, and operational efficiency.

200 stocks Updated May 9, 2026

$124.97T Total Market Cap

— Avg P/E Ratio

$117.86 Avg Share Price

+0.00% Avg Daily Change

Profit margin measures the percentage of revenue that a company converts into net profit after all expenses. Companies with margins above 25% are exceptional — they possess the pricing power, operational efficiency, and competitive advantages that allow them to keep a quarter or more of every dollar earned.

High profit margins are one of Warren Buffett's key criteria for identifying durable competitive advantages, or "economic moats." Companies with consistently high margins typically benefit from strong brands, network effects, intellectual property, or scale advantages that competitors cannot easily replicate. Technology and pharmaceutical companies frequently lead in margins due to low marginal costs and patent protection.

This list screens for companies with net profit margins above 25% and market caps over $1 billion. It displays margin percentages, revenue, net income, and market cap. Financial data is sourced from the most recent annual reports and updated weekly.

#	Symbol	Name	Price	Margin	Revenue	Net Income	Market Cap
1	AUPH	Aurinia Pharmaceuticals Inc	$15.39	96.40%	208.47M	190.37M	2.02B
2	MAIN	Main Street Capital Corp	$54.01	87.11%	575.75M	501.55M	4.91B
3	LBRDK	Liberty Broadband-C	$36.10	85.53%	1.05B	898.64M	5.34B
4	LBRDA	Liberty Broadband-A	$36.04	85.53%	1.05B	900.13M	5.34B
5	MAIN	Main Street Capital Corp	$54.01	82.75%	502.66M	394.09M	4.91B
6	LBRDK	Liberty Broadband-C	$36.10	81.25%	1.04B	801.24M	5.34B
7	LBRDA	Liberty Broadband-A	$36.04	81.25%	1.04B	802.58M	5.34B
8	OR	Or Royalties Inc	$38.42	74.30%	365.65M	271.67M	9.58B
9	NNNN	Anbio Biotechnology Ltd	$25.84	74.06%	28.53M	21.13M	3.72B
10	TGTX	Tg Therapeutics Inc	$42.86	72.56%	582.44M	422.62M	6.54B
11	OR	Or Royalties Inc	$38.42	70.59%	337.35M	225.58M	9.58B
12	NNNN	Anbio Biotechnology Ltd	$25.84	70.36%	39.85M	26.55M	3.72B
13	INVA	Innoviva Inc	$22.88	65.92%	359.60M	237.06M	1.70B
14	HTGC	Hercules Capital Inc	$16.15	63.80%	535.75M	341.82M	3.07B
15	WPM	Wheaton Precious Metals Corp	$138.85	63.58%	3.06B	1.95B	83.46B
16	WLTH	Wealthfront Corp	$11.26	62.96%	319.49M	201.14M	1.70B
17	OTF	Blue Owl Technology Finance	$10.92	62.89%	1.30B	820.59M	5.09B
18	INVA	Innoviva Inc	$22.88	62.62%	334.57M	198.50M	1.70B
19	TFPM	Triple Flag Precious Met	$33.38	61.74%	525.68M	324.58M	9.19B
20	FNV	Franco-Nevada Corp	$232.11	61.01%	2.45B	1.49B	60.10B
21	MTG	Mgic Investment Corp	$26.75	60.84%	1.09B	665.32M	5.67B
22	APP	Applovin Corp-Class A	$468.55	60.83%	5.48B	3.33B	153.18B
23	HTGC	Hercules Capital Inc	$16.15	60.61%	452.91M	260.07M	3.07B
24	WPM	Wheaton Precious Metals Corp	$138.85	60.40%	2.36B	1.35B	83.46B
25	TPL	Texas Pacific Land Corp	$394.20	60.31%	808.87M	487.82M	27.57B
26	OTF	Blue Owl Technology Finance	$10.92	59.75%	986.41M	558.31M	5.09B
27	TFPM	Triple Flag Precious Met	$33.38	58.65%	384.32M	213.57M	9.19B
28	UNIT	Uniti Group Inc	$11.77	58.39%	1.92B	1.12B	2.70B
29	FNV	Franco-Nevada Corp	$232.11	57.96%	2.19B	1.20B	60.10B
30	GFL	Gfl Environmental Inc-Sub Vt	$36.74	57.95%	8.44B	4.89B	17.76B
31	MTG	Mgic Investment Corp	$26.75	57.80%	1.08B	591.98M	5.67B
32	APP	Applovin Corp-Class A	$468.55	57.79%	4.39B	2.40B	153.18B
33	TPL	Texas Pacific Land Corp	$394.20	57.29%	762.01M	413.60M	27.57B
34	NVDA	NVIDIA Corp	$215.20	55.60%	215.44B	119.79B	5.26T
35	AGO	Assured Guaranty Ltd	$75.05	55.58%	849.87M	472.36M	3.43B
36	UNIT	Uniti Group Inc	$11.77	55.47%	1.53B	804.02M	2.70B
37	BLX	Banco Latinoamericano Come-E	$53.63	55.22%	162.58M	216.26M	1.90B
38	GFL	Gfl Environmental Inc-Sub Vt	$36.74	55.05%	8.50B	4.44B	17.76B
39	NMIH	Nmi Holdings Inc	$38.87	55.05%	681.66M	375.28M	2.96B
40	ESNT	Essent Group Ltd	$63.13	54.72%	1.18B	647.10M	5.92B
41	ACT	Enact Holdings Inc	$44.04	54.56%	1.15B	625.66M	6.10B
42	GSL	Global Ship Lease Inc-Cl A	$39.75	54.34%	817.70M	444.31M	1.53B
43	NVDA	NVIDIA Corp	$215.20	53.06%	75.57B	37.98B	5.26T
44	AGO	Assured Guaranty Ltd	$75.05	52.80%	766.55M	383.44M	3.43B
45	KRYS	Krystal Biotech Inc	$305.71	52.64%	371.72M	195.67M	8.75B
46	BLX	Banco Latinoamericano Come-E	$53.63	52.46%	152.34M	182.38M	1.90B
47	NMIH	Nmi Holdings Inc	$38.87	52.30%	616.77M	305.60M	2.96B
48	ESNT	Essent Group Ltd	$63.13	51.98%	1.09B	539.20M	5.92B
49	ACT	Enact Holdings Inc	$44.04	51.83%	1.10B	540.81M	6.10B
50	GSL	Global Ship Lease Inc-Cl A	$39.75	51.62%	772.22M	377.63M	1.53B
51	BAM	Brookfield Asset Mgmt-A	$49.76	51.59%	4.73B	2.44B	79.91B
52	V	Visa Inc	$318.79	50.14%	39.32B	19.72B	633.96B
53	PFBC	Preferred Bank/Los Angeles	$95.47	50.09%	231.27M	138.61M	1.27B
54	SFBS	Servisfirst Bancshares Inc	$79.48	49.88%	504.13M	275.87M	4.33B
55	VRSN	Verisign Inc	$288.21	49.84%	1.54B	766.45M	25.09B
56	AGI	Alamos Gold Inc-Class A	$43.38	48.97%	2.40B	1.17B	24.31B
57	IDCC	Interdigital Inc	$279.61	48.76%	616.56M	300.62M	7.13B
58	AER	Aercap Holdings Nv	$150.00	48.73%	7.38B	3.60B	25.33B
59	OTTR	Otter Tail Corp	$88.03	48.68%	563.62M	274.37M	3.69B
60	RDN	Radian Group Inc	$38.06	48.62%	1.15B	559.78M	5.15B
61	WINA	Winmark Corp	$373.23	48.40%	82.33M	39.85M	1.32B
62	EWBC	East West Bancorp Inc	$122.99	48.12%	2.23B	1.29B	16.71B
63	V	Visa Inc	$318.79	47.63%	35.45B	16.00B	633.96B
64	PFBC	Preferred Bank/Los Angeles	$95.47	47.59%	211.98M	114.34M	1.27B
65	CLSK	Cleanspark Inc	$14.20	47.56%	708.50M	336.98M	3.58B
66	DAC	Danaos Corp	$119.77	47.45%	1.15B	545.29M	2.44B
67	SFBS	Servisfirst Bancshares Inc	$79.48	47.39%	447.36M	220.32M	4.33B
68	VRSN	Verisign Inc	$288.21	47.35%	1.46B	656.02M	25.09B
69	DBSDY	DBS Group Holdings Ltd	$185.02	47.28%	6.08B	3.46B	162.83B
70	QXO	Qxo Inc	$18.76	46.72%	178.01M	78.78M	13.60B
71	AGI	Alamos Gold Inc-Class A	$43.38	46.52%	1.84B	812.30M	24.31B
72	LGND	Ligand Pharmaceuticals	$221.41	46.42%	246.31M	114.34M	4.13B
73	IDCC	Interdigital Inc	$279.61	46.32%	504.84M	221.53M	7.13B
74	AER	Aercap Holdings Nv	$150.00	46.29%	7.08B	3.10B	25.33B
75	OTTR	Otter Tail Corp	$88.03	46.25%	557.93M	244.44M	3.69B
76	RDN	Radian Group Inc	$38.06	46.19%	1.15B	502.74M	5.15B
77	TRIN	Trinity Capital Inc	$16.63	46.18%	360.79M	166.61M	1.42B
78	HASI	Ha Sustainable Infrastructur	$41.05	46.08%	380.51M	175.34M	5.39B
79	WABC	Westamerica Bancorporation	$55.26	46.06%	236.47M	108.66M	1.33B
80	WINA	Winmark Corp	$373.23	45.98%	80.82M	35.21M	1.32B
81	EWBC	East West Bancorp Inc	$122.99	45.71%	2.08B	1.09B	16.71B
82	MA	Mastercard Inc	$495.48	45.65%	32.45B	14.81B	444.26B
83	CATY	Cathay General Bancorp	$57.45	45.62%	704.93M	302.10M	3.83B
84	PB	Prosperity Bancshares Inc	$69.26	45.60%	1.27B	576.56M	6.98B
85	RGLD	Royal Gold Inc	$238.91	45.25%	1.25B	566.24M	20.18B
86	CLSK	Cleanspark Inc	$14.20	45.18%	393.72M	168.54M	3.58B
87	TSM	Taiwan Semiconductor Manufacturing	$401.01	45.10%	21.49T	9.69T	54.07T
88	DAC	Danaos Corp	$119.77	45.08%	1.13B	482.94M	2.44B
89	BYD	Boyd Gaming Corp	$85.64	45.05%	3.71B	1.67B	6.34B
90	LYFT	Lyft Inc-A	$14.35	45.03%	5.88B	2.65B	5.58B
91	DBSDY	DBS Group Holdings Ltd	$185.02	44.92%	6.04B	3.09B	162.83B
92	OZK	Bank Ozk	$48.50	44.89%	1.18B	716.80M	5.50B
93	IBOC	International Bancshares Crp	$73.27	44.49%	672.73M	414.70M	4.59B
94	LGND	Ligand Pharmaceuticals	$221.41	44.10%	221.96M	92.74M	4.13B
95	FFIN	First Finl Bankshares Inc	$32.26	43.99%	532.78M	253.00M	4.62B
96	TRIN	Trinity Capital Inc	$16.63	43.87%	285.50M	118.66M	1.42B
97	HASI	Ha Sustainable Infrastructur	$41.05	43.78%	320.67M	132.99M	5.39B
98	WABC	Westamerica Bancorporation	$55.26	43.76%	211.51M	87.47M	1.33B
99	CCEC	Capital Clean Energy Carrier	$20.61	43.48%	394.66M	171.61M	1.23B
100	MA	Mastercard Inc	$495.48	43.37%	28.51B	11.71B	444.26B

Frequently Asked Questions

What is a profit margin?

Profit margin is the percentage of revenue remaining after all expenses, taxes, and costs are deducted. A company with $100 million in revenue and $30 million in net income has a 30% profit margin. There are several types: gross margin (revenue minus cost of goods sold), operating margin (after operating expenses), and net margin (after everything including taxes and interest). This list uses net profit margin, the most comprehensive measure.

What is a good profit margin?

Average profit margins vary significantly by industry. Software companies average 20-30%, pharmaceutical companies 15-25%, while retail and restaurants typically operate at 3-8%. A margin above 25% — the threshold for this list — places a company among the most profitable in any sector. What matters more than the absolute level is the trend: expanding margins suggest improving business quality, while declining margins may signal competitive pressure.

What sectors have the highest profit margins?

Software, semiconductors, and pharmaceuticals consistently have the highest profit margins. Software companies benefit from near-zero marginal costs — selling one more license costs almost nothing. Semiconductor designers like Nvidia and Broadcom have margins above 50%. Pharmaceutical companies enjoy patent-protected pricing power. Financial services, especially asset management, also produces high margins. Capital-light business models generally produce higher margins than asset-heavy industries.

Why do high-margin companies make good investments?

High margins indicate pricing power and competitive advantages that protect against competition and economic downturns. Companies with fat margins have a buffer — even if revenue dips, they remain profitable. They generate more free cash flow per dollar of revenue, funding dividends, buybacks, and R&D without debt. High-margin companies also tend to have higher returns on equity, meaning they create more value for shareholders per dollar invested in the business.

What is an economic moat?

An economic moat is a durable competitive advantage that protects a company's profits from competitors, similar to a castle's moat. Types include brand power (Apple, Coca-Cola), network effects (Visa, Meta), switching costs (Microsoft, Adobe), cost advantages (Walmart), and intellectual property (pharmaceutical patents). Companies with wide moats tend to maintain high profit margins for years or decades. The concept was popularized by Warren Buffett as central to his investment philosophy.

Can profit margins be misleading?

Yes. One-time events can temporarily inflate or depress margins — asset sales, tax benefits, or restructuring charges can distort the picture. Some companies show high net margins but low operating margins because of investment income or tax advantages rather than strong business operations. Cyclical companies may show peak margins at the top of a cycle that are unsustainable. Always look at multi-year margin trends rather than a single period.

What is the difference between gross margin and net margin?

Gross margin measures profitability after subtracting only the direct costs of producing goods or services (cost of goods sold). Net margin subtracts everything — operating expenses, interest, taxes, and other costs. Gross margin shows the core profitability of the product itself, while net margin shows overall company profitability. A company with high gross margins but low net margins may be overspending on sales, marketing, or R&D, which could be either a problem or a growth investment.