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High Gross Margin Stocks: Invest in Highly Profitable and Resilient Businesses

Curated by Anish Das
Refreshed Sep 22, 2026

High Gross Margin Stocks are elite companies with massive pricing power and superior profitability that can easily absorb rising costs.

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Market Signal

Data Insight

This screen is currently exhibiting strong clustering in the Financial Services sector (36% of constituents).

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Compare Top 3 Open Screener
TickerCompanyPriceMkt CapReturn 6MD/EGross Margin
KLAC logoKLAC
KLA Corporation$183.97$240.32B21.7%0.961.3%
BAP logoBAP
Credicorp Ltd.$389.97$30.98B18.2%0.991.8%
ADSK logoADSK
Autodesk, Inc.$218.85$46.21B-11.6%0.991.2%
ADEA logoADEA
Adeia Inc.$25.53$2.82B4.2%0.975.4%
VLTO logoVLTO
Veralto Corporation$95.18$23.4B7.5%0.960.2%
SEZL logoSEZL
Sezzle Inc.$116.55$3.92B62%0.890.8%
EHC logoEHC
Encompass Health Corporation$121.56$12.06B24.7%0.873.1%
SFBS logoSFBS
ServisFirst Bancshares, Inc.$41.92$4.58B14%0.893.7%
FTNT logoFTNT
Fortinet, Inc.$175.23$128.38B111.7%0.880.4%
AVGO logoAVGO
Broadcom Inc.$362.66$1.73T12.4%0.867.5%
NVS logoNVS
Novartis AG$140.98$267.96B-4.8%0.874.4%
CBSH logoCBSH
Commerce Bancshares, Inc.$56.55$8.24B17.6%0.880.7%
UNTY logoUNTY
Unity Bancorp, Inc.$58.56$588M15.4%0.863.4%
FIGR logoFIGR
Figure Technology Solutions, Inc. Class A Common Stock$35.29$6.44B6.3%0.895.3%
SYK logoSYK
Stryker Corporation$274.19$105.11B-17.6%0.765.2%
TMP logoTMP
Tompkins Financial Corporation$98.48$1.42B29.9%0.772.6%
PODD logoPODD
Insulet Corp.$140.62$9.74B-38.1%0.771.1%
NBN logoNBN
Northeast Bank$132.50$1.1B22.9%0.760.4%
CHKP logoCHKP
Check Point Software Technologies Ltd.$134.25$13.71B-11.2%0.786.1%
MGNI logoMGNI
Magnite, Inc.$25.31$3.62B103.3%0.764.8%
NVO logoNVO
Novo Nordisk A/S$39.82$176.83B8.1%0.780.6%
IDXX logoIDXX
IDEXX Laboratories, Inc.$515.30$40.65B-10.9%0.762.4%
SCCO logoSCCO
Southern Copper Corporation$198.06$165.25B25.6%0.762.3%
V logoV
Visa Inc.$369.95$690.71B21.5%0.780.2%
CHCO logoCHCO
City Holding Company$140.24$1.98B17.9%0.678.8%
AFYA logoAFYA
Afya Limited$13.55$1.22B-10.6%0.664%
SCHW logoSCHW
The Charles Schwab Corporation$106.88$185.88B12.2%0.686.7%
LPG logoLPG
Dorian LPG Ltd.$56.64$2.42B69.9%0.663.3%
FRST logoFRST
Primis Financial Corp$15.92$396M21.9%0.668.4%
AZN logoAZN
AstraZeneca PLC$168.10$130.28B-8.7%0.681.9%
KLAC logoKLAC
KLA Corporation
$183.97Price
Mkt Cap$240.32B
Return 6M21.7%
D/E0.9
Gross Margin61.3%
BAP logoBAP
Credicorp Ltd.
$389.97Price
Mkt Cap$30.98B
Return 6M18.2%
D/E0.9
Gross Margin91.8%
ADSK logoADSK
Autodesk, Inc.
$218.85Price
Mkt Cap$46.21B
Return 6M-11.6%
D/E0.9
Gross Margin91.2%
ADEA logoADEA
Adeia Inc.
$25.53Price
Mkt Cap$2.82B
Return 6M4.2%
D/E0.9
Gross Margin75.4%
VLTO logoVLTO
Veralto Corporation
$95.18Price
Mkt Cap$23.4B
Return 6M7.5%
D/E0.9
Gross Margin60.2%
SEZL logoSEZL
Sezzle Inc.
$116.55Price
Mkt Cap$3.92B
Return 6M62%
D/E0.8
Gross Margin90.8%
EHC logoEHC
Encompass Health Corporation
$121.56Price
Mkt Cap$12.06B
Return 6M24.7%
D/E0.8
Gross Margin73.1%
SFBS logoSFBS
ServisFirst Bancshares, Inc.
$41.92Price
Mkt Cap$4.58B
Return 6M14%
D/E0.8
Gross Margin93.7%
FTNT logoFTNT
Fortinet, Inc.
$175.23Price
Mkt Cap$128.38B
Return 6M111.7%
D/E0.8
Gross Margin80.4%
AVGO logoAVGO
Broadcom Inc.
$362.66Price
Mkt Cap$1.73T
Return 6M12.4%
D/E0.8
Gross Margin67.5%
NVS logoNVS
Novartis AG
$140.98Price
Mkt Cap$267.96B
Return 6M-4.8%
D/E0.8
Gross Margin74.4%
CBSH logoCBSH
Commerce Bancshares, Inc.
$56.55Price
Mkt Cap$8.24B
Return 6M17.6%
D/E0.8
Gross Margin80.7%
UNTY logoUNTY
Unity Bancorp, Inc.
$58.56Price
Mkt Cap$588M
Return 6M15.4%
D/E0.8
Gross Margin63.4%
FIGR logoFIGR
Figure Technology Solutions, Inc. Class A Common Stock
$35.29Price
Mkt Cap$6.44B
Return 6M6.3%
D/E0.8
Gross Margin95.3%
SYK logoSYK
Stryker Corporation
$274.19Price
Mkt Cap$105.11B
Return 6M-17.6%
D/E0.7
Gross Margin65.2%
TMP logoTMP
Tompkins Financial Corporation
$98.48Price
Mkt Cap$1.42B
Return 6M29.9%
D/E0.7
Gross Margin72.6%
PODD logoPODD
Insulet Corp.
$140.62Price
Mkt Cap$9.74B
Return 6M-38.1%
D/E0.7
Gross Margin71.1%
NBN logoNBN
Northeast Bank
$132.50Price
Mkt Cap$1.1B
Return 6M22.9%
D/E0.7
Gross Margin60.4%
CHKP logoCHKP
Check Point Software Technologies Ltd.
$134.25Price
Mkt Cap$13.71B
Return 6M-11.2%
D/E0.7
Gross Margin86.1%
MGNI logoMGNI
Magnite, Inc.
$25.31Price
Mkt Cap$3.62B
Return 6M103.3%
D/E0.7
Gross Margin64.8%
NVO logoNVO
Novo Nordisk A/S
$39.82Price
Mkt Cap$176.83B
Return 6M8.1%
D/E0.7
Gross Margin80.6%
IDXX logoIDXX
IDEXX Laboratories, Inc.
$515.30Price
Mkt Cap$40.65B
Return 6M-10.9%
D/E0.7
Gross Margin62.4%
SCCO logoSCCO
Southern Copper Corporation
$198.06Price
Mkt Cap$165.25B
Return 6M25.6%
D/E0.7
Gross Margin62.3%
V logoV
Visa Inc.
$369.95Price
Mkt Cap$690.71B
Return 6M21.5%
D/E0.7
Gross Margin80.2%
CHCO logoCHCO
City Holding Company
$140.24Price
Mkt Cap$1.98B
Return 6M17.9%
D/E0.6
Gross Margin78.8%
AFYA logoAFYA
Afya Limited
$13.55Price
Mkt Cap$1.22B
Return 6M-10.6%
D/E0.6
Gross Margin64%
SCHW logoSCHW
The Charles Schwab Corporation
$106.88Price
Mkt Cap$185.88B
Return 6M12.2%
D/E0.6
Gross Margin86.7%
LPG logoLPG
Dorian LPG Ltd.
$56.64Price
Mkt Cap$2.42B
Return 6M69.9%
D/E0.6
Gross Margin63.3%
FRST logoFRST
Primis Financial Corp
$15.92Price
Mkt Cap$396M
Return 6M21.9%
D/E0.6
Gross Margin68.4%
AZN logoAZN
AstraZeneca PLC
$168.10Price
Mkt Cap$130.28B
Return 6M-8.7%
D/E0.6
Gross Margin81.9%
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Learn more about High Gross Margin Stocks: Invest in Highly Profitable and Resilient Businesses

How We Build This List

  • Gross Profit Margin > 60%Ensures the company operates with a premium product or service, allowing for massive pricing power.
  • Operating Margin > 15%Confirms that high gross profits are not entirely consumed by excessive SG&A or R&D expenses.
  • Return on Equity (ROE) > 15%Indicates management is highly efficient at generating profits from shareholder equity.
  • Revenue Growth (YoY) > 5%Filters out declining businesses and focuses on growing franchises.
  • Debt-to-Equity Ratio < 1.0Maintains a safe balance sheet, protecting the high-margin business from debt distress.
Open Screener

What Makes a Stock a High Gross Margin Stocks constituent?

This screen identifies companies with gross margins exceeding 60%, a hallmark of pricing power and competitive moats. By filtering for high-margin businesses like Microsoft, which maintained 68% margins in 2023, investors can isolate firms that easily absorb inflationary costs compared to low-margin retailers like Target, which struggled with 25% margins during the 2022 supply chain crunch.

>60% GM
Profitability
Gross Margin > 60%
ROE 15+
Efficiency
ROE >= 15%
Low Debt
Solvency
D/E Ratio < 0.5
1

Filter for Pricing Power

Select companies with gross margins above 60% to ensure they dictate prices, similar to Apple's 44% margins which allowed it to thrive during the 2022 inflation surge.

2

Verify Capital Efficiency

Require ROE above 15% to ensure high margins translate to shareholder wealth, as seen with Visa's consistent 30%+ ROE over the last decade.

3

Check Balance Sheet Health

Limit D/E to under 0.5 to avoid interest rate sensitivity, protecting against the 2022 rate hike cycle that crushed highly leveraged firms like Carvana.

Performance Dynamics: When Does This Strategy Outperform?

Strategy performance behaves differently based on market conditions. Let's analyze when this strategy outperforms and when it lags:

When High Margins Lead

  • ✓ During the 2022 inflationary spike, high-margin software stocks outperformed the broader S&P 500 by 12% as they passed costs to customers.
  • ✓ In the 2008 financial crisis, firms with 60%+ margins like Johnson & Johnson saw 20% less volatility than the average industrial stock.
  • ✓ During the 2020 pandemic recovery, high-margin tech leaders like Adobe grew 40% as demand for digital infrastructure surged.

When High Margins Trail

  • ✗ In the 2021 'reopening' trade, low-margin cyclical stocks like airlines outperformed high-margin tech by 25% as travel demand exploded.
  • ✗ During the 2016 commodity rebound, energy stocks with low margins surged 30% while high-margin tech stagnated due to valuation saturation.
  • ✗ When interest rates dropped to near zero in 2020, capital-intensive, low-margin utilities provided a 10% dividend yield advantage over growth stocks.

How to Use the Screener Results Table

To build a resilient portfolio, do not buy stocks on simple statistics alone. Use the key columns in our table to audit the durability, safety, and returns of each stock:

Gross Margin Percentage

Measures core pricing power; Adobe's 88% margin shows extreme software scalability compared to Ford's 10% automotive margin.

Return on Equity Percentage

Indicates management efficiency; Home Depot's 100%+ ROE demonstrates superior capital usage compared to a typical utility's 10% ROE.

Debt to Equity Ratio

Shows leverage risk; Microsoft's 0.3 ratio provides safety during rate hikes, unlike AT&T's 1.5 ratio which limits dividend growth.

Operating Margin Percentage

Shows efficiency after overhead; Meta's 35% operating margin in 2023 highlights its dominance versus Intel's 5% margin.

Risk Factors & Warning Signs to Track

The Valuation Overhang

High-margin stocks often trade at extreme premiums, leading to 'multiple compression' if growth slows. For example, Zoom traded at 100x sales in 2020, but as growth normalized in 2022, the stock plummeted 80% despite maintaining high gross margins.

What are High Gross Margin Stocks?

High gross margin stocks represent companies that retain a massive portion of their revenue after accounting for direct costs of goods sold. This financial cushion typically signals strong pricing power, competitive advantages, and robust unit economics.

  • Gross Margin > 60%
  • Operating Margin > 15%
  • Positive Revenue Growth
  • Return on Equity > 15%

Why Invest in High Gross Margin Stocks?

Pricing Power

Easily pass rising costs onto consumers.

High Profitability

Generates superior cash flows for reinvestment.

Economic Moat

Signals strong brand equity and competitive advantages.

Market Outperformance

Historically delivers superior risk-adjusted returns.

Anish Das
SCREEN CURATED BY

Anish Das

MBA, IIM Kozhikode · Founder & Individual Investor

LinkedIn
5+ years experience

Founder of VCP Scanner, former Flipkart Brand Manager, and active US equity investor focused on transparent research workflows.

Editorial Disclosure: The data in this screener is systematically filtered using transparent rules, ensuring unbiased results. Reviewed for E-E-A-T standards. Not financial advice.

Frequently Asked Questions

Why is 60% the threshold?
60% is the benchmark for software and luxury goods, such as LVMH, which maintain pricing power that prevents margin erosion during recessions.
Does this screen work for retail?
Rarely, as retail margins are typically 20-30%; Costco is an outlier, but even they rarely exceed 15% gross margin.
What if a company has high margins but low ROE?
This suggests poor asset utilization, like Intel in 2023, where high production costs offset gross margin gains.
Are high margins always good?
No, they can attract competition; Netflix's high margins in 2018 invited Disney+ and others, forcing a margin-diluting content spending war.
How do I avoid value traps?
Check if the high margin is declining; if a firm like 3M sees margins drop from 50% to 40% over 3 years, it signals a loss of competitive advantage.
Can I use this for cyclical stocks?
Cyclical stocks like ExxonMobil rarely pass this screen because their margins fluctuate with oil prices, often dropping below 20% in down cycles.
Does this screen favor tech?
Yes, because software companies like Salesforce have near-zero marginal costs, allowing them to consistently hit 75%+ gross margins.
How often should I re-screen?
Quarterly, as seen with companies like Nvidia, whose margins expanded from 60% to 75% in 2023 due to the AI chip demand shift.

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