Hospitality Property Fund (JSE:TSP) Operating Margin % Explanation
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Hospitality Property Fund Operating Margin % Related Terms
Hospitality Property Fund Operating Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hospitality Property Fund Operating Margin % Chart
JSE:TSP vs HST, PK, APLE: Operating Margin % Comparison
For the REIT - Hotel & Motel subindustry, Hospitality Property Fund's Operating Margin %, along with its competitors' market caps and Operating Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Hospitality Property Fund Operating Margin % vs REITs Industry
For the REITs industry and Real Estate sector, Hospitality Property Fund's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Hospitality Property Fund's Operating Margin % falls into.
Hospitality Property Fund Operating Margin % Calculation
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
Hospitality Property Fund's Operating Margin % for the fiscal year that ended in Mar. 2020 is calculated as
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Hospitality Property Fund (JSE:TSP) has a Operating Margin % of 33.89% as of Sep. 2020. Operating margin is the ratio of total operating income to net sales. View historical data on Hospitality Property Fund and its competitors. This is 63% below median its historical median of 90.71. Over the past decade, Hospitality Property Fund's Operating Margin % has ranged from 87.25 to 94.63.
Is Hospitality Property Fund's Operating Margin % too high?
Hospitality Property Fund's current Operating Margin % of 33.89% is 63% below median its 10-year median of 90.71. Over the past 10 years, this metric has ranged from a low of 87.25 to a high of 94.63. The REITs industry median Operating Margin % is 52.71. Hospitality Property Fund's value of 33.89% is 35.7% below this industry median. Overall, Hospitality Property Fund has a GF Score™ of 11/100, reflecting its overall financial health beyond just this single metric.
How does Hospitality Property Fund's Operating Margin % compare to HST and PK?
Hospitality Property Fund's Operating Margin % of 33.89% can be compared against companies in the REITs industry. The industry median Operating Margin % is 52.71. Hospitality Property Fund's value of 33.89% is 35.7% below this benchmark. Historically, Hospitality Property Fund's own Operating Margin % has ranged from 87.25 to 94.63 over the past decade. While the company's 10-year median is 90.71 vs. the industry median of 52.71, Hospitality Property Fund has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Operating Margin % for a REITs company?
The median Operating Margin % among REITs companies is 52.71, based on 749 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Hospitality Property Fund's current Operating Margin % of 33.89% is 35.7% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Hospitality Property Fund and its competitors. For the REITs industry, the median Operating Margin % is 52.71 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Hospitality Property Fund's current Operating Margin % is 33.89%, which is 63% below median its own 10-year median of 90.71. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Hospitality Property Fund stock overvalued right now?
Hospitality Property Fund (JSE:TSP) has a current Operating Margin % of 33.89%. The current Operating Margin % is 33.89%, which is 63% below median its 10-year median of 90.71 and 35.7% below the REITs industry median of 52.71. Hospitality Property Fund's overall GF Score™ is 11/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Hospitality Property Fund (JSE:TSP), the current Operating Margin % is 33.89% as of Sep. 2020. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Hospitality Property Fund Ltd is a specialised real estate investment trust investing in the hotel and leisure sector, providing investors with exposure to both the property and hospitality industries. The company's portfolio caters to a wide-ranging domestic and international market and accommodates various segments including corporate, government, leisure, group conferencing and event business. The properties are well diversified in terms of geographic location and class of hotel, thus mitigating the inherent risks associated within the cyclical nature of the hospitality industry.
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