These Are the 4 Most Profitable Companies On the Dow Jones Today

The Dow is stacked with high-quality businesses, but some are stronger than others. These 4 blue chips are far more profitable than the other 26.

Feb 7, 2014 at 2:00PM

The Dow Jones Industrial Average (DJINDICES:^DJI) consists of 30 of America's finest businesses. There's not a bad egg among them since last summer's makeover, and all 30 members are profitable right now. But even among heroes, some will be stronger than others. These are the four most profitable businesses on the Dow Jones today.

Pfe Logo

Image source: Pfizer.

With a trailing non-generally accepted accounting principles net income margin of 20.1%, Pfizer (NYSE:PFE) stands in fourth place -- more than 2 percentage point ahead of the next challenger.

The medical giant works in a highly profitable field, where years of intensive drug and devices research turns into decades of high and stable profits. But Pfizer also plays this game better than almost anyone in the medical sector. With certified blockbusters like Viagra, Celebrex, and Lipitor under your belt, it's easy to defend sky-high margins.


Image source: Microsoft.

Walking up the profit ladder, you'll find Microsoft (NASDAQ:MSFT) next with a 20.9% net margin.

The computing giant hasn't exactly rewarded shareholders over the last decade, but not for a lack of delivering profits. It's been a decade since Microsoft's trailing net margins last dipped below 20%, and sales more than doubled over the same span. Through macroeconomic disasters, Vista debacles, and the purported death of the PC, Microsoft's nearly robotic business heart takes a licking and keeps on ticking.

MSFT Profit Margin (TTM) Chart

MSFT Profit Margin (TTM) data by YCharts.

Gs Logo

Image source: Goldman Sachs.

Next up, Goldman Sachs (NYSE:GS) ranks second with a 23.2% net margin.

Goldman sets itself apart from other megabanks by leaning heavily on its investment banking division. You can think of Goldman as a massive hedge fund that just happens to run some traditional banking operations on the side. The company has both the experience and the massive scale to do it better than anyone else, and it shows in these huge income margins.

Visa Logo

Image source: Visa.

Virtually unchallenged at the top, Visa (NYSE:V) sports a massive 39% income margin.

Visa runs only one reportable business division, the eponymous Visa payment services. This global financial network took decades to plan and to build, but the hard work is mostly over. Now Visa can sit back and enjoy the rich margins that come with dominating a worldwide business with only a couple of serious rivals. To paraphrase Warren Buffett, Visa could be run by a ham sandwich nowadays. Sure, the company still works to develop the next big thing, but Visa is doing it from an unassailable platform of massive core profits.

And that's why Visa boasts the widest net margins on the Dow Jones today.

There's more to investing than making ham sandwiches ... right?
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Anders Bylund has no position in any stocks mentioned. The Motley Fool recommends Goldman Sachs and Visa. The Motley Fool owns shares of Microsoft and Visa. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information