Heidelberg Materials Operating Margin vs. Gross Profit

HEI Stock  EUR 126.85  3.25  2.63%   
Based on Heidelberg Materials' profitability indicators, Heidelberg Materials AG may not be well positioned to generate adequate gross income at the moment. It has a very high risk of underperforming in January. Profitability indicators assess Heidelberg Materials' ability to earn profits and add value for shareholders.
For Heidelberg Materials profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Heidelberg Materials to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Heidelberg Materials AG utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Heidelberg Materials's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Heidelberg Materials AG over time as well as its relative position and ranking within its peers.
  
Check out Risk vs Return Analysis.
Please note, there is a significant difference between Heidelberg Materials' value and its price as these two are different measures arrived at by different means. Investors typically determine if Heidelberg Materials is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Heidelberg Materials' price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.

Heidelberg Materials Gross Profit vs. Operating Margin Fundamental Analysis

Comparative valuation techniques use various fundamental indicators to help in determining Heidelberg Materials's current stock value. Our valuation model uses many indicators to compare Heidelberg Materials value to that of its competitors to determine the firm's financial worth.
Heidelberg Materials AG is rated below average in operating margin category among its peers. It is rated below average in gross profit category among its peers fabricating about  118,607,824,427  of Gross Profit per Operating Margin. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Heidelberg Materials' earnings, one of the primary drivers of an investment's value.

Heidelberg Gross Profit vs. Operating Margin

Operating Margin shows how much operating income a company makes on each dollar of sales. It is one of the profitability indicators which helps analysts to understand whether the firm is successful or not making money from everyday operations.

Heidelberg Materials

Operating Margin

 = 

Operating Income

Revenue

X

100

 = 
0.10 %
A good Operating Margin is required for a company to be able to pay for its fixed costs or payout its debt, which implies that the higher the margin, the better. This ratio is most effective in evaluating the earning potential of a company over time when comparing it against a firm's competitors.
Gross Profit is the most basic measure of business operational efficiency. It is simply the difference between sales revenue and the cost associated with making a product or providing a service. It is calculated before deducting administrative expenses, taxes, and interest payments.

Heidelberg Materials

Gross Profit

 = 

Revenue

-

Cost of Revenue

 = 
12.43 B
Gross Profit varies significantly from one sector to another and tells an investor how much money a business would have made if it didn't have to pay any overhead expenses such as salary, taxes, or rent.

Heidelberg Gross Profit Comparison

Heidelberg Materials is rated below average in gross profit category among its peers.

Heidelberg Materials Profitability Projections

The most important aspect of a successful company is its ability to generate a profit. For investors in Heidelberg Materials, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Heidelberg Materials will eventually generate negative long term returns. The profitability progress is the general direction of Heidelberg Materials' change in net profit over the period of time. It can combine multiple indicators of Heidelberg Materials, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
HeidelbergCement AG produces and distributes cement, aggregates, ready-mixed concrete, and asphalt worldwide. HeidelbergCement AG was founded in 1873 and is headquartered in Heidelberg, Germany. HEIDELBERGCEMENT operates under Building Materials classification in Germany and is traded on Frankfurt Stock Exchange. It employs 579 people.

Heidelberg Profitability Driver Comparison

Profitability drivers are factors that can directly affect your investment outlook on Heidelberg Materials. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Heidelberg Materials position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Heidelberg Materials' important profitability drivers and their relationship over time.

Use Heidelberg Materials in pair-trading

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Heidelberg Materials position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Heidelberg Materials will appreciate offsetting losses from the drop in the long position's value.

Heidelberg Materials Pair Trading

Heidelberg Materials AG Pair Trading Analysis

The ability to find closely correlated positions to Heidelberg Materials could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Heidelberg Materials when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Heidelberg Materials - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Heidelberg Materials AG to buy it.
The correlation of Heidelberg Materials is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Heidelberg Materials moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Heidelberg Materials moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Heidelberg Materials can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.
Pair CorrelationCorrelation Matching

Use Investing Themes to Complement your Heidelberg Materials position

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Drugs Theme
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Other Information on Investing in Heidelberg Stock

To fully project Heidelberg Materials' future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Heidelberg Materials at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Heidelberg Materials' income statement, its balance sheet, and the statement of cash flows.
Potential Heidelberg Materials investors and stakeholders can use historical trends found within financial statements to determine how well the company is positioned for the future. Although Heidelberg Materials investors may work on each financial statement separately, they are all related. The changes in Heidelberg Materials's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Heidelberg Materials's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet but not equivalent to net income shown on the income statement. Please read more on our technical analysis and fundamental analysis pages.