When the operating income margin continues to grow, it means a company is becoming more efficient in generating profits from its operating activities.
The operating income margin is a more effective measure than the net income margin when evaluating whether a company can generate income, as the metric excludes those items on which it has no or limited control, but that could weigh on the net income notably in some years.
The stocks listed below meet the above criteria, as their operating income margins have grown in recent years.
Prologis Inc.
The first stock investors may want to consider Prologis Inc. (PLD, Financial), a San Francisco, California-based international logistics real estate investment trust (REIT).
The stock saw its trailing 12-month operating income margin (34.81% as of the September 2021 quarter) grow by 10.20% on average every year over the past five years.
The share price increased by 200% over the past five years to close at $155.43 on Friday for a market capitalization of $114.91 billion.
The company paid a quarterly dividend of $0.63 per common share on Dec. 31 for a dividend yield of 1.62% as of Jan. 21.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $175.56 per share.
Vanguard Group Inc., BlackRock Inc. and State Street Corp. are among the largest top fund holders of the company with 12.90%, 9.86% and 5.89% of shares outstanding, respectively.
Activision Blizzard Inc.
The second stock that investors may want to consider is Activision Blizzard Inc. (ATVI, Financial), a Santa Monica, California-based electronic gaming and multimedia company.
The company saw its trailing 12-month operating income margin (39.95% as of the September 2021 quarter) grow by 6.10% on average every year over the past five years.
The share price of $81.40 at close on Friday has risen by 105.64% over the past five years for a market capitalization of $63.38 billion.
The company paid an annual dividend of $0.47 per common share on May 6 for a dividend yield of 0.58% as of Jan. 21.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of $91.79 per share.
Vanguard Grup Inc., BlackRock Inc. and Public Investment Fund are among the largest top fund holders of the company with 8.32%, 7.46% and 4.86% of shares outstanding, respectively.
Microchip Technology Inc.
The third stock that investors may want to consider is Microchip Technology Inc. (MCHP, Financial), a Chandler, Arizona-based global manufacturer of semiconductors.
The company saw its trailing 12-month operating income margin (25.85% as of the September 2021 quarter) grow by 1.70% on average every year over the past five years.
The share price ($73.33 at close on Friday) has risen by 113.11% over the past five years for a market capitalization of $40.69 billion.
The company paid a quarterly dividend of $0.232 per common share on Dec. 3 for a 12-month dividend yield of 1.16% and a forward dividend yield of 1.27% as of Jan. 21.
On Wall Street, the stock has a median recommendation rating of overweight with an average target price of approximately $98.17 per share.
Advent Capital Management, Vanguard Group Inc. and BlackRock Inc. are among the largest top fund holders of the company with 7.55%, 5.65% and 3.70% of shares outstanding, respectively.
