Inflation Has Meant Good Times For These Five Companies

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Forbes has been keeping track of the companies that have expanded their operating margins to see who is piling up the profits. Here are the five with the highest operating margin during inflation.

Three energy companies, a fertilizer firm and a drug maker have all been doing super well while most of the rest of the U.S. grapples with soaring prices.to the worst inflation since the 1980s. Just ask the companies that are making bank on higher prices.

Operating margin is a fair indicator because it excludes borrowing, Wayne State University finance professor Mai Iskandar-Datta told. “Essentially, you’re trying to have a broader picture of company performance,” she said. “You’re trying to see how they’re doing without considering financing. It separates financing and investment decision-making.”

comes to an end, it may come as no surprise that three of the top five spots on the current list of widest operating margins are energy companies.surged from 20.3% for the 12 months ending in September 2021 to 64% over the last year. The 64% is more than 20 percentage points greater than the company’s prior all-time high, set in 2015. EQT didn’t respond to a request for comment.

But there’s something else to consider when examining the profit margins of EQT and other energy companies. They aren’t investing as much in new projects as they normally would during the boom stage of the commodity cycle. Research and development and exploration expenses take a bite out of operating margins. So if energy companies aren’t shelling out for new wells, operating margins will be higher.

 

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