High Operating Margin Stocks: Identify Highly Profitable and Moat-Protected Businesses

Refreshed Sep 22, 2026

High Operating Margin Stocks are elite businesses that generate exceptional profitability from their core operations, providing a strong cushion against economic downturns.

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This screen is currently exhibiting strong clustering in the Technology sector (24% of constituents).

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Ticker	Company	Price	Mkt Cap	Return 6M	D/E	Op Margin
TXN	Texas Instruments Incorporated	$270.87	$247.37B	43.6%	0.9	37.3%
KLAC	KLA Corporation	$183.97	$240.32B	21.7%	0.9	41.7%
WMS	Advanced Drainage Systems, Inc.	$126.88	$9.72B	-8%	0.9	23.1%
BKE	The Buckle, Inc.	$40.79	$2.1B	-18.5%	0.9	20.8%
ADSK	Autodesk, Inc.	$218.85	$46.21B	-11.6%	0.9	27.5%
AMP	Ameriprise Financial, Inc.	$535.72	$48.16B	20.9%	0.9	27.1%
ADEA	Adeia Inc.	$25.53	$2.82B	4.2%	0.9	45.7%
VLTO	Veralto Corporation	$95.18	$23.4B	7.5%	0.9	22.7%
NUTX	Nutex Health, Inc.	$201.48	$1.39B	112.1%	0.8	43%
SEZL	Sezzle Inc.	$116.55	$3.92B	62%	0.8	40.4%
NVS	Novartis AG	$140.98	$267.96B	-4.8%	0.8	30.5%
QCOM	QUALCOMM Incorporated	$194.23	$203.94B	51.3%	0.8	23.2%
RACE	Ferrari N.V.	$416.13	$73.2B	26.4%	0.7	29.6%
ASR	Grupo Aeroportuario del Sureste, S. A. B. de C. V.	$245.07	$7.35B	-23.4%	0.7	42.1%
FDS	FactSet Research Systems Inc.	$284.10	$10.1B	36.3%	0.7	29.6%
LAUR	Laureate Education, Inc.	$36.28	$5.08B	5.6%	0.7	24.4%
CHKP	Check Point Software Technologies Ltd.	$134.25	$13.71B	-11.2%	0.7	29%
PX	P10, Inc.	$7.55	$909M	2.6%	0.7	23%
NVO	Novo Nordisk A/S	$39.82	$176.83B	8.1%	0.7	43.1%
ERO	Ero Copper Corp.	$34.70	$3.62B	40.1%	0.7	36.1%
IDXX	IDEXX Laboratories, Inc.	$515.30	$40.65B	-10.9%	0.7	32%
SCCO	Southern Copper Corporation	$198.06	$165.25B	25.6%	0.7	56.9%
CAAP	Corporacion America Airports S.A.	$24.19	$3.95B	-3.4%	0.7	23.5%
V	Visa Inc.	$369.95	$690.71B	21.5%	0.7	60.7%
MFIN	Medallion Financial Corp.	$11.95	$276M	36.7%	0.6	41.6%
BX	Blackstone Inc.	$126.41	$99.59B	15.6%	0.6	53.9%
AWI	Armstrong World Industries, Inc.	$161.88	$6.84B	-2.4%	0.6	29.2%
JNJ	Johnson & Johnson	$269.47	$648.67B	14.5%	0.6	26.5%
CSCO	Cisco Systems, Inc.	$111.46	$439.31B	41.4%	0.6	24.3%
ADBE	Adobe Inc.	$249.52	$99.18B	0.8%	0.6	35.7%

TXN

Texas Instruments Incorporated

$270.87Price

Mkt Cap$247.37B

Return 6M43.6%

D/E0.9

Op Margin37.3%

KLAC

KLA Corporation

$183.97Price

Mkt Cap$240.32B

Return 6M21.7%

D/E0.9

Op Margin41.7%

WMS

Advanced Drainage Systems, Inc.

$126.88Price

Mkt Cap$9.72B

Return 6M-8%

D/E0.9

Op Margin23.1%

BKE

The Buckle, Inc.

$40.79Price

Mkt Cap$2.1B

Return 6M-18.5%

D/E0.9

Op Margin20.8%

ADSK

Autodesk, Inc.

$218.85Price

Mkt Cap$46.21B

Return 6M-11.6%

D/E0.9

Op Margin27.5%

AMP

Ameriprise Financial, Inc.

$535.72Price

Mkt Cap$48.16B

Return 6M20.9%

D/E0.9

Op Margin27.1%

ADEA

Adeia Inc.

$25.53Price

Mkt Cap$2.82B

Return 6M4.2%

D/E0.9

Op Margin45.7%

VLTO

Veralto Corporation

$95.18Price

Mkt Cap$23.4B

Return 6M7.5%

D/E0.9

Op Margin22.7%

NUTX

Nutex Health, Inc.

$201.48Price

Mkt Cap$1.39B

Return 6M112.1%

D/E0.8

Op Margin43%

SEZL

Sezzle Inc.

$116.55Price

Mkt Cap$3.92B

Return 6M62%

D/E0.8

Op Margin40.4%

NVS

Novartis AG

$140.98Price

Mkt Cap$267.96B

Return 6M-4.8%

D/E0.8

Op Margin30.5%

QCOM

QUALCOMM Incorporated

$194.23Price

Mkt Cap$203.94B

Return 6M51.3%

D/E0.8

Op Margin23.2%

RACE

Ferrari N.V.

$416.13Price

Mkt Cap$73.2B

Return 6M26.4%

D/E0.7

Op Margin29.6%

ASR

Grupo Aeroportuario del Sureste, S. A. B. de C. V.

$245.07Price

Mkt Cap$7.35B

Return 6M-23.4%

D/E0.7

Op Margin42.1%

FDS

FactSet Research Systems Inc.

$284.10Price

Mkt Cap$10.1B

Return 6M36.3%

D/E0.7

Op Margin29.6%

LAUR

Laureate Education, Inc.

$36.28Price

Mkt Cap$5.08B

Return 6M5.6%

D/E0.7

Op Margin24.4%

CHKP

Check Point Software Technologies Ltd.

$134.25Price

Mkt Cap$13.71B

Return 6M-11.2%

D/E0.7

Op Margin29%

P10, Inc.

$7.55Price

Mkt Cap$909M

Return 6M2.6%

D/E0.7

Op Margin23%

NVO

Novo Nordisk A/S

$39.82Price

Mkt Cap$176.83B

Return 6M8.1%

D/E0.7

Op Margin43.1%

ERO

Ero Copper Corp.

$34.70Price

Mkt Cap$3.62B

Return 6M40.1%

D/E0.7

Op Margin36.1%

IDXX

IDEXX Laboratories, Inc.

$515.30Price

Mkt Cap$40.65B

Return 6M-10.9%

D/E0.7

Op Margin32%

SCCO

Southern Copper Corporation

$198.06Price

Mkt Cap$165.25B

Return 6M25.6%

D/E0.7

Op Margin56.9%

CAAP

Corporacion America Airports S.A.

$24.19Price

Mkt Cap$3.95B

Return 6M-3.4%

D/E0.7

Op Margin23.5%

Visa Inc.

$369.95Price

Mkt Cap$690.71B

Return 6M21.5%

D/E0.7

Op Margin60.7%

MFIN

Medallion Financial Corp.

$11.95Price

Mkt Cap$276M

Return 6M36.7%

D/E0.6

Op Margin41.6%

Blackstone Inc.

$126.41Price

Mkt Cap$99.59B

Return 6M15.6%

D/E0.6

Op Margin53.9%

AWI

Armstrong World Industries, Inc.

$161.88Price

Mkt Cap$6.84B

Return 6M-2.4%

D/E0.6

Op Margin29.2%

JNJ

Johnson & Johnson

$269.47Price

Mkt Cap$648.67B

Return 6M14.5%

D/E0.6

Op Margin26.5%

CSCO

Cisco Systems, Inc.

$111.46Price

Mkt Cap$439.31B

Return 6M41.4%

D/E0.6

Op Margin24.3%

ADBE

Adobe Inc.

$249.52Price

Mkt Cap$99.18B

Return 6M0.8%

D/E0.6

Op Margin35.7%

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Learn more about High Operating Margin Stocks: Identify Highly Profitable and Moat-Protected Businesses

How We Build This List

Operating Margin > 20%Ensures the company operates with high profitability and pricing power far exceeding the market average.
Return on Invested Capital (ROIC) > 15%Confirms management allocates capital efficiently to generate high-quality returns.
Revenue Growth (YoY) > 5%Filters out declining businesses, ensuring high margins are paired with top-line expansion.
Debt to Equity Ratio < 1.0Guarantees the company is not overly leveraged, preserving its strong balance sheet.
Operating Cash Flow > 0Verifies that operating profits are backed by actual cash inflows rather than accounting adjustments.

Open Screener

What Makes a Stock a High Operating Margin Stocks constituent?

This screen identifies companies with operating margins above 25%, filtering for firms that command significant pricing power and cost efficiency. For example, Microsoft maintained operating margins above 40% during the 2022 tech downturn, proving that high-margin businesses can sustain profitability even when market multiples compress.

MARGIN

Profitability

Op Margin > 25%

GROWTH

Revenue

5Y Rev CAGR > 10%

DEBT

Solvency

Debt/Equity < 0.5

Filter for Pricing Power

We isolate companies with operating margins over 25%, like Visa, which consistently maintains 60%+ margins due to its dominant payment network moat.

Verify Revenue Growth

We require 5-year revenue CAGR above 10% to ensure the margin isn't just cost-cutting, similar to how Adobe grew revenue 15% annually from 2018-2023.

Assess Balance Sheet Health

We cap Debt/Equity at 0.5 to exclude over-leveraged firms; for instance, Apple's strong cash position allowed it to survive the 2008 crisis with ease.

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 firms like Eli Lilly outperformed the S&P 500 by 20% by passing on costs.
✓ In the 2000 dot-com crash, companies with 30%+ margins held value 12% better than low-margin speculative tech.
✓ During the 2020 COVID-19 lockdowns, high-margin software firms like Salesforce surged 35% as demand for digital infrastructure spiked.

When High Margins Trail

✗ During the 2021 'reopening trade,' low-margin cyclical stocks like Carnival Cruise Lines outperformed high-margin tech by 40%.
✗ When interest rates fall rapidly, as in 2009, low-quality, low-margin small caps often rally 50% faster than high-margin stalwarts.
✗ In periods of extreme speculative mania, like the 1999 bubble, high-margin companies often lag as investors chase unprofitable growth.

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:

Operating Margin Percentage

Measures core efficiency; Meta's 35% margin in 2023 shows superior scale compared to a retailer like Target at 5%.

Return on Equity Percentage

Shows how well management uses capital; Microsoft's 35%+ ROE highlights why it is a superior compounder versus Intel's declining 5% ROE.

Debt to Equity Ratio

Indicates leverage; a ratio of 0.2 for Alphabet is safer than a 2.5 ratio for a debt-heavy utility like PG&E.

Free Cash Flow Yield Percentage

Cash left after capex; a 5% yield for a company like PepsiCo is more sustainable than the negative cash flow of a startup like Rivian.

Risk Factors & Warning Signs to Track

The Margin Compression Trap

High margins can collapse if a company loses its competitive advantage. Intel historically boasted 30%+ operating margins, but as AMD gained market share in 2019-2022, Intel's margins plummeted to under 10%, causing the stock to lose half its value.

What are High Operating Margin Stocks?

These are companies that demonstrate superior pricing power and operational efficiency by maintaining operating margins well above the market average. This financial strength typically indicates a durable competitive advantage or economic moat.

Operating Margin > 20%
Positive Revenue Growth
ROIC > 15%
Debt-to-Equity < 1.0

Why Invest in High Operating Margin Stocks?

Pricing Power

Ability to pass rising costs onto consumers easily.

High Profitability

Converts sales into operating profits highly efficiently.

Economic Moat

Indicates strong, sustainable competitive advantages.

Cash Generation

Fuels reinvestment, dividends, and share buybacks.

SCREEN CURATED BY

Anish Das

MBA, IIM Kozhikode · Founder & Individual Investor

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 use 25% as the margin threshold?

25% is the top quartile for the S&P 500, effectively filtering for companies with significant moats like Adobe or Visa.

Does high margin mean the stock is expensive?

Often yes; high-margin stocks like NVIDIA traded at 50x earnings in 2023 because investors pay a premium for consistent profitability.

Can a high-margin company be a bad investment?

Yes, if growth stalls; 3M maintained high margins for years but its stagnant 1% revenue growth led to significant underperformance since 2018.

How does debt impact margin quality?

High debt forces interest payments that eat into net income, even if operating margins are high, as seen with AT&T's struggle in 2020.

Are these stocks defensive?

Generally yes; high-margin firms like Coca-Cola have historically held up better during the 2008 financial crisis than low-margin peers.

Should I look at gross or operating margin?

Operating margin is better because it includes overhead; a company like Salesforce with high gross margins but high marketing spend needs the operating filter.

Do these stocks pay dividends?

Many do, like Microsoft or Apple, because high margins generate excess cash that can be returned to shareholders.

How often should I re-screen?

Quarterly; margin trends can shift quickly, as seen when Netflix's margins dipped in 2022 due to increased content spending.

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