Instructions

Define high profit. There are many ways to define highly profitable; we can use earnings growth rates, profit margins or total net profits, to name a few. For example, Company A has a quarterly earnings growth of 17 percent, net profit margins of less than 10 percent and net profits of $11 billion. Company B has a quarterly earnings growth of 30 percent, net profit margins of 25 percent and net profits of $1.3 million. Which company is more profitable? It depends. Most investors focus on earnings growth rates because Wall Street is mostly concerned with future expectations rather than past profits. For purposes of this article, let’s define high profit as a company that has yearly earnings growth of more than 50 percent.

Search for stocks that meet your high-profit, low-risk criteria now that you have it set. Many financial websites have stock screeners that are easy to use. If you have an online brokerage account, it should also provide a stock screening tool. For the sake of the examples being used in this article, we will use the Yahoo! Finance stock screener.

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References

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