A Trio of Stocks With High Ebitda Margins

If you want to have a higher chance of finding companies that are in good shape from a financial standpoint, you may want to consider stocks with trailing 12-month Ebitda margins that are topping the S&P 500’s 13.62% as of the time of writing.

The Ebitda margin, which is calculated as earnings before interest, taxes, depreciation and amortization divided by total revenue, is a good indicator of a company’s financial health as it doesn’t consider the effect of unique decisions and tax laws when appraising the performance of a company. These decisions refer to the recognition of amortization and depreciation, which may differ significantly, even among companies that operate in the same industry.

The three companies listed below meet these criteria. Wall Street sell-side analysts have also issued positive recommendation ratings for them.

Johnson & Johnson

The first company that makes the cut is Johnson & Johnson (

JNJ, Financial), a New Brunswick, New Jersey-based health care conglomerate.

Johnson & Johnson’s Ebitda margin is 32.36%, resulting from Ebitda of $30.349 billion and revenue of $93.775 billion for the trailing 12 months ended in December 2021.

The closing share price of $182.12 on Friday was up 12.67% compared to year-ago levels. The company has a market capitalization of $478.91 billion and a 52-week range of $155.72 to $183.19.

The stock grants a forward dividend yield of 2.33%. The company paid a quarterly dividend of $1.06 per share on March 8.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $185.50 per share.

Procter & Gamble

The second company that qualifies is Procter & Gamble Co. (

PG, Financial), a Cincinnati-based multinational consumer-branded packaged goods company.

Procter & Gamble’s Ebitda margin is 26.73%, resulting from Ebitda of $20.941 billion and revenue of $78.346 billion for the trailing 12 months ended December.

Friday’s closing share price of $160.10 was up 16.93% compared to year-ago levels for a market capitalization of $383.77 billion and a 52-week range of $130.29 to $165.35.

The stock grants a forward dividend yield of 2.17%. The company last paid a quarterly dividend of 87 cents per share on Feb. 15.

On Wall Street, the stock has a median recommendation rating of overweight and an average target price of $168.75 per share.

Mastercard

The third stock that meets the criteria is Mastercard Inc. (

MA, Financial), a Purchase, New York-based global provider of credit card services.

Mastercard’s Ebitda margin is 60.71%, resulting from Ebitda of $11.464 billion and revenue of $18.884 billion for the trailing 12 months ended in December.

The closing share price of $352.27 on Friday was down 7.26% compared to year-ago levels for a market capitalization of $344.34 billion and a 52-week range of $305.61 to $401.50.

The stock grants a forward dividend yield of 0.56%. The company will pay a quarterly dividend of 49 cents per common share on May 9.

On Wall Street, the stock has a median recommendation rating of buy and an average target price of $431.16 per share.