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Philip van Doorn

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Jan. 18, 2020, 12:42 p.m. EST

These stocks soared even as the companies lost money — here’s why that’s not as crazy as it sounds

Forty-five money-losing companies have at least matched the S&P 1500’s 28% gain over the past year

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By Philip van Doorn, MarketWatch


Bloomberg
Shares of Caesars Entertainment Corp. have returned 55% over the past year, even as the company has lost money.

The monetary forces that have helped feed the bull market are so strong that scores of stocks have risen significantly over the past year even as the companies themselves have been losing money.

A list of some of the best performers among the money losers is below.

In a Wall Street Journal article , James Mackintosh called Tesla /zigman2/quotes/203558040/lastsale TSLA +11.00%  and General Electric /zigman2/quotes/208495069/composite GE +2.58%  “the two most valuable loss-making companies,” after Tesla’s shares had doubled in three months and GE’s stock had risen 44%.

“The proportion of U.S.-listed companies losing money for three years reached its highest last year in data stretching back to the late 1990s,” Mackintosh wrote, citing data compiled by Andrew Lapthorne, global head of quantitative research at Société Générale.

With negative interest rates in Europe and Japan, and increasing stimulus by the U.S. Federal Reserve, maybe investors shouldn’t be surprised that the S&P 500 Index /zigman2/quotes/210599714/realtime SPX +0.25%  has returned 26% over the past year. Investors see the U.S. stock market as a haven.

Tesla and GE provide contrasts when looking at money-losing companies whose stocks have soared. Tesla’s shares have risen after the electric-car maker reported a third-quarter profit, opened a China factory in the fourth quarter and enjoyed a spike in demand.

GE represents a cleanup project. Even after recent gains, the stock is down 59% over the past three years.

Another example of a recovery play, listed below, is Caesars Entertainment /zigman2/quotes/205281174/composite CZR -0.23% , which is up 55% over the past year, as the casino company has continued its multiyear investments in property upgrades.

A look at the broad U.S. market, as represented by the Russell 3000 /zigman2/quotes/210598149/delayed RUA +0.33% , shows 808 companies that have negative earnings per share for the past four reported quarters combined. Of this group, 149 of the stocks have returned 50% or more over the past 12 months through Jan. 12, with dividends reinvested.

That is such a large list that we turned to the S&P Composite 1500 Index, which is made up of the large-cap S&P 500, the S&P 400 Mid-Cap Index /zigman2/quotes/219506813/composite MID +0.67%  and the S&P Small-Cap 600 /zigman2/quotes/210599868/delayed SML +0.36% . S&P Dow Jones Indices has various criteria for a company’s initial inclusion in an index. One of these is that it most show four quarters of profitability. So all these companies have been consistently profitable at some point, even if they have been going through a difficult period recently.

Among the S&P 1500, there are 211 companies that have lost at least a penny a share for the most recently reported four quarters combined through Jan. 12. The S&P 1500 Composite Index has returned 28% over the past year, and 45 companies have performed at least as well as the index, with four returning more than 100%.

Here’s the entire list, sorted by 12-month total returns:

Company Ticker Total return - 12 months through Jan. 12 EPS - past four reported quarters Sales growth - past 12 months from previous 12-month period Gross margin - most recent quarter Gross margin - year-earlier quarter
Diebold Nixdorf Inc. /zigman2/quotes/206289339/composite DBD 201% -$4.48 0% 25.35% 21.20%
Cutera Inc. /zigman2/quotes/205259530/composite CUTR 158% -$2.62 6% 56.88% 52.75%
Ultra Clean Holdings Inc. /zigman2/quotes/208969279/composite UCTT 133% -$0.01 -5% 18.68% 14.06%
LivePerson Inc. /zigman2/quotes/203565636/composite LPSN 102% -$1.21 15% 70.05% 72.38%
Invacare Corp. /zigman2/quotes/203588527/composite IVC 82% -$1.07 -4% 28.29% 26.57%
PDF Solutions Inc. /zigman2/quotes/207638258/composite PDFS 82% -$0.22 -11% 59.44% 46.61%
Agilysys Inc. /zigman2/quotes/208309172/composite AGYS 81% -$0.52 15% 46.40% 47.95%
Cardiovascular Systems Inc. /zigman2/quotes/204781833/composite CSII 80% -$0.09 15% 79.99% 81.21%
Western Digital Corp. /zigman2/quotes/204213617/composite WDC 76% -$5.27 -24% 20.45% 33.09%
Veeco Instruments Inc. /zigman2/quotes/209920828/composite VECO 76% -$4.08 -30% 34.80% 33.29%
Lumentum Holdings Inc. /zigman2/quotes/204419752/composite LITE 75% -$0.62 22% 35.87% 35.58%
Momenta Pharmaceuticals Inc. 74% -$2.16 -40% N/A N/A
Triumph Group Inc. /zigman2/quotes/210055594/composite TGI 73% -$3.43 -4% 15.50% 9.03%
Universal Electronics Inc. /zigman2/quotes/206661370/composite UEIC 71% -$1.05 8% 23.98% 21.53%
Synaptics Inc. /zigman2/quotes/208827271/composite SYNA 70% -$0.67 -14% 36.28% 33.02%
Rambus Inc. /zigman2/quotes/208867483/composite RMBS 70% -$0.75 -12% 66.80% 79.03%
Colfax Corp. 68% -$3.38 32% 43.49% 32.68%
Tenet Healthcare Corp. /zigman2/quotes/207964487/composite THC 67% -$2.31 -2% 8.47% 7.77%
Harmonic Inc. /zigman2/quotes/202944345/composite HLIT 64% -$0.10 1% 64.88% 49.02%
Cytokinetics Inc. /zigman2/quotes/209591999/composite CYTK 61% -$2.08 40% N/A N/A
Circor International Inc. /zigman2/quotes/206443155/composite CIR 59% -$7.86 5% 30.95% 32.39%
Aecom /zigman2/quotes/204198156/composite ACM 58% -$1.67 0% 4.66% 3.54%
Stericycle Inc. /zigman2/quotes/202722990/composite SRCL 56% -$4.91 -5% 31.62% 36.44%
Caesars Entertainment Corp. /zigman2/quotes/205281174/composite CZR 55% -$1.06 6% 39.53% 36.93%
Papa John's International Inc. /zigman2/quotes/207343722/composite PZZA 55% -$0.50 -9% 14.05% 10.78%
Equifax Inc. /zigman2/quotes/208789454/composite EFX 54% -$3.18 1% 47.63% 45.74%
Coty Inc. Class A /zigman2/quotes/208645074/composite COTY 53% -$4.95 -7% 57.64% 55.87%
Boise Cascade Co. /zigman2/quotes/200104224/composite BCC 53% -$0.16 -8% 13.36% 11.33%
Jacobs Engineering Group Inc. /zigman2/quotes/209082472/composite J 51% -$0.69 21% 18.72% 18.88%
P.H. Glatfelter Co. /zigman2/quotes/201799418/composite GLT 48% -$1.30 9% 15.60% 14.88%
Zimmer Biomet Holdings Inc. /zigman2/quotes/205473073/composite ZBH 45% -$0.49 0% 63.35% 63.43%
Hain Celestial Group Inc. /zigman2/quotes/201324629/composite HAIN 41% -$2.26 -7% 19.64% 16.50%
Legg Mason Inc. 41% -$0.74 -8% 83.91% 82.31%
Crocs Inc. /zigman2/quotes/201458716/composite CROX 39% -$0.34 10% 52.38% 53.27%
Hess Corp. /zigman2/quotes/203832174/composite HES 36% -$0.68 -3% 12.42% 20.89%
National Storage Affiliates Trust /zigman2/quotes/201952574/composite NSA 35% -$0.47 13% 38.46% 37.87%
Cohu Inc. /zigman2/quotes/209891788/composite COHU 35% -$2.67 68% 34.12% 39.90%
Live Nation Entertainment Inc. /zigman2/quotes/203077299/composite LYV 33% -$0.01 7% 22.44% 21.15%
CyrusOne Inc. 32% -$0.15 22% 16.94% 21.73%
Coca-Cola Consolidated Inc. /zigman2/quotes/203602448/composite COKE 32% -$0.60 4% 33.88% 34.21%
Edison International /zigman2/quotes/206923834/composite EIX 32% -$0.99 -4% 19.59% 19.28%
Allergan plc 31% -$27.85 -1% 46.32% 44.59%
Kite Realty Group Trust /zigman2/quotes/204637140/composite KRG 29% -$0.56 -8% 29.66% 29.89%
Weyerhaeuser Co. /zigman2/quotes/200438029/composite WY 29% -$0.20 -13% 16.28% 23.98%
Washington Real Estate Investment Trust 28% -$0.05 1% 15.23% 24.03%
Source: FactSet

You can click on the tickers for more about each company, including profiles, news, price ratios, analysts ratings and financials.

To be sure, many of these stocks recovered from previous declines as investors became enthusiastic about management teams’ turnaround efforts. But some additional data may also point to reasons for investors’ confidence.

The table includes sales-growth numbers as well as gross margins for the most recently reported quarter and the year-earlier quarter. These might provide some insight into why these stocks have performed so well over the past year.

A company’s gross margin is its sales, less the cost of goods sold, divided by sales. It is a measure of pricing power. A narrowing margin might result from discounting or other efforts to increase or defend market share. A continually narrow margin might be a bad sign. An expending margin, especially when sales are growing, is a positive sign that a company is remaining competitive.

Gross margin isn’t used in the banking, insurance and real estate investing industries. It is most useful to gauge a single company’s pricing power over time. It doesn’t make for useful comparisons across industries.

  Don’t miss: This basket of dividend growth stocks can help your portfolio stand out in 2020

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/zigman2/quotes/203558040/lastsale
US : U.S.: Nasdaq
$ 177.90
+17.63 +11.00%
Volume: 306.59M
Jan. 27, 2023 4:15p
P/E Ratio
54.97
Dividend Yield
N/A
Market Cap
$506.09 billion
Rev. per Employee
$753,983
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/zigman2/quotes/208495069/composite
US : U.S.: NYSE
$ 83.23
+2.09 +2.58%
Volume: 7.79M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
0.38%
Market Cap
$88.66 billion
Rev. per Employee
$455,685
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,070.56
+10.13 +0.25%
Volume: 0.00
Jan. 27, 2023 5:10p
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/zigman2/quotes/205281174/composite
US : U.S.: Nasdaq
$ 52.41
-0.12 -0.23%
Volume: 2.97M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$11.27 billion
Rev. per Employee
$216,143
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/zigman2/quotes/210598149/delayed
US : Russell Indices
2,361.86
+7.69 +0.33%
Volume: 5.94M
Jan. 27, 2023 4:30p
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/zigman2/quotes/219506813/composite
US : U.S.: NYSE Arca
$ 44.24
+0.29 +0.67%
Volume: 914.00
Jan. 27, 2023 4:10p
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/zigman2/quotes/210599868/delayed
US : S&P US
1,248.59
+4.45 +0.36%
Volume: 328.56M
Jan. 27, 2023 5:10p
loading...
/zigman2/quotes/206289339/composite
US : U.S.: NYSE
$ 2.43
+0.09 +3.85%
Volume: 1.14M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$185.04 million
Rev. per Employee
$161,432
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/zigman2/quotes/205259530/composite
US : U.S.: Nasdaq
$ 34.21
-0.03 -0.09%
Volume: 320,087
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$671.63 million
Rev. per Employee
$543,764
loading...
/zigman2/quotes/208969279/composite
US : U.S.: Nasdaq
$ 33.38
-0.70 -2.05%
Volume: 208,844
Jan. 27, 2023 4:00p
P/E Ratio
26.32
Dividend Yield
N/A
Market Cap
$1.55 billion
Rev. per Employee
$342,901
loading...
/zigman2/quotes/203565636/composite
US : U.S.: Nasdaq
$ 12.69
+0.47 +3.85%
Volume: 1.07M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$920.51 million
Rev. per Employee
$335,145
loading...
/zigman2/quotes/203588527/composite
US : U.S.: NYSE
$ 0.74
+0.12 +19.16%
Volume: 527,928
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$23.41 million
Rev. per Employee
$262,293
loading...
/zigman2/quotes/207638258/composite
US : U.S.: Nasdaq
$ 31.84
-0.61 -1.88%
Volume: 59,733
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.21 billion
Rev. per Employee
$338,850
loading...
/zigman2/quotes/208309172/composite
US : U.S.: Nasdaq
$ 83.02
-1.55 -1.83%
Volume: 264,530
Jan. 27, 2023 4:00p
P/E Ratio
200.34
Dividend Yield
N/A
Market Cap
$2.12 billion
Rev. per Employee
$116,169
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/zigman2/quotes/204781833/composite
US : U.S.: Nasdaq
$ 13.38
-0.15 -1.07%
Volume: 144,434
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$566.46 million
Rev. per Employee
$327,621
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/zigman2/quotes/204213617/composite
US : U.S.: Nasdaq
$ 44.97
+1.21 +2.77%
Volume: 5.39M
Jan. 27, 2023 4:00p
P/E Ratio
15.50
Dividend Yield
0.00%
Market Cap
$13.90 billion
Rev. per Employee
$268,892
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/zigman2/quotes/209920828/composite
US : U.S.: Nasdaq
$ 20.03
-0.26 -1.28%
Volume: 163,832
Jan. 27, 2023 4:00p
P/E Ratio
24.81
Dividend Yield
N/A
Market Cap
$1.04 billion
Rev. per Employee
$591,485
loading...
/zigman2/quotes/204419752/composite
US : U.S.: Nasdaq
$ 60.30
+0.43 +0.72%
Volume: 511,118
Jan. 27, 2023 4:00p
P/E Ratio
38.13
Dividend Yield
N/A
Market Cap
$4.08 billion
Rev. per Employee
$259,868
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/zigman2/quotes/210055594/composite
US : U.S.: NYSE
$ 10.99
+0.07 +0.64%
Volume: 613,397
Jan. 27, 2023 4:00p
P/E Ratio
7.74
Dividend Yield
0.00%
Market Cap
$709.82 million
Rev. per Employee
$225,606
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/zigman2/quotes/206661370/composite
US : U.S.: Nasdaq
$ 22.71
+0.24 +1.07%
Volume: 52,386
Jan. 27, 2023 4:00p
P/E Ratio
250.39
Dividend Yield
N/A
Market Cap
$284.96 million
Rev. per Employee
$143,203
loading...
/zigman2/quotes/208827271/composite
US : U.S.: Nasdaq
$ 125.46
-1.28 -1.01%
Volume: 391,759
Jan. 27, 2023 4:00p
P/E Ratio
18.11
Dividend Yield
N/A
Market Cap
$5.05 billion
Rev. per Employee
$1.02M
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/zigman2/quotes/208867483/composite
US : U.S.: Nasdaq
$ 42.28
-0.92 -2.13%
Volume: 716,699
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$4.64 billion
Rev. per Employee
$614,793
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/zigman2/quotes/207964487/composite
US : U.S.: NYSE
$ 52.79
+1.13 +2.19%
Volume: 2.31M
Jan. 27, 2023 4:00p
P/E Ratio
10.40
Dividend Yield
N/A
Market Cap
$5.59 billion
Rev. per Employee
$188,328
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/zigman2/quotes/202944345/composite
US : U.S.: Nasdaq
$ 14.75
-0.06 -0.41%
Volume: 969,212
Jan. 27, 2023 4:00p
P/E Ratio
38.98
Dividend Yield
N/A
Market Cap
$1.56 billion
Rev. per Employee
$486,525
loading...
/zigman2/quotes/209591999/composite
US : U.S.: Nasdaq
$ 43.12
-0.13 -0.30%
Volume: 405,922
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$4.09 billion
Rev. per Employee
$585,893
loading...
/zigman2/quotes/206443155/composite
US : U.S.: NYSE
$ 26.01
+0.72 +2.85%
Volume: 118,086
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$514.99 million
Rev. per Employee
$249,138
loading...
/zigman2/quotes/204198156/composite
US : U.S.: NYSE
$ 85.95
-0.80 -0.92%
Volume: 572,892
Jan. 27, 2023 4:00p
P/E Ratio
39.41
Dividend Yield
0.73%
Market Cap
$12.03 billion
Rev. per Employee
$262,964
loading...
/zigman2/quotes/202722990/composite
US : U.S.: Nasdaq
$ 52.53
+0.04 +0.08%
Volume: 183,787
Jan. 27, 2023 4:00p
P/E Ratio
696.68
Dividend Yield
N/A
Market Cap
$4.84 billion
Rev. per Employee
$179,440
loading...
/zigman2/quotes/205281174/composite
US : U.S.: Nasdaq
$ 52.41
-0.12 -0.23%
Volume: 2.97M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$11.27 billion
Rev. per Employee
$216,143
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/zigman2/quotes/207343722/composite
US : U.S.: Nasdaq
$ 89.78
+2.50 +2.86%
Volume: 462,420
Jan. 27, 2023 4:00p
P/E Ratio
47.43
Dividend Yield
1.87%
Market Cap
$3.08 billion
Rev. per Employee
$150,340
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/zigman2/quotes/208789454/composite
US : U.S.: NYSE
$ 218.24
+1.06 +0.49%
Volume: 909,087
Jan. 27, 2023 4:00p
P/E Ratio
37.93
Dividend Yield
0.71%
Market Cap
$26.59 billion
Rev. per Employee
$407,669
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/zigman2/quotes/208645074/composite
US : U.S.: NYSE
$ 9.86
-0.10 -1.00%
Volume: 3.98M
Jan. 27, 2023 4:00p
P/E Ratio
116.55
Dividend Yield
0.00%
Market Cap
$8.47 billion
Rev. per Employee
$483,364
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/zigman2/quotes/200104224/composite
US : U.S.: NYSE
$ 73.64
+0.23 +0.31%
Volume: 146,556
Jan. 27, 2023 4:00p
P/E Ratio
3.21
Dividend Yield
0.81%
Market Cap
$2.90 billion
Rev. per Employee
$1.40M
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/zigman2/quotes/209082472/composite
US : U.S.: NYSE
$ 121.91
-0.81 -0.66%
Volume: 371,977
Jan. 27, 2023 4:03p
P/E Ratio
24.48
Dividend Yield
0.85%
Market Cap
$15.54 billion
Rev. per Employee
$248,105
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/zigman2/quotes/201799418/composite
US : U.S.: NYSE
$ 4.35
+0.30 +7.41%
Volume: 648,862
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$181.43 million
Rev. per Employee
$448,804
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/zigman2/quotes/205473073/composite
US : U.S.: NYSE
$ 125.88
+0.38 +0.30%
Volume: 1.39M
Jan. 27, 2023 4:03p
P/E Ratio
95.45
Dividend Yield
0.76%
Market Cap
$26.34 billion
Rev. per Employee
$366,805
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/zigman2/quotes/201324629/composite
US : U.S.: Nasdaq
$ 19.82
+0.77 +4.04%
Volume: 1.04M
Jan. 27, 2023 4:00p
P/E Ratio
28.09
Dividend Yield
N/A
Market Cap
$1.70 billion
Rev. per Employee
$609,565
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/zigman2/quotes/201458716/composite
US : U.S.: Nasdaq
$ 121.32
+0.27 +0.22%
Volume: 730,714
Jan. 27, 2023 4:00p
P/E Ratio
13.39
Dividend Yield
N/A
Market Cap
$7.47 billion
Rev. per Employee
$553,977
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/zigman2/quotes/203832174/composite
US : U.S.: NYSE
$ 156.25
-4.19 -2.61%
Volume: 1.92M
Jan. 27, 2023 4:00p
P/E Ratio
21.76
Dividend Yield
0.96%
Market Cap
$49.47 billion
Rev. per Employee
$7.33M
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/zigman2/quotes/201952574/composite
US : U.S.: NYSE
$ 40.43
+0.78 +1.97%
Volume: 889,121
Jan. 27, 2023 4:00p
P/E Ratio
43.50
Dividend Yield
5.44%
Market Cap
$5.08 billion
Rev. per Employee
$360,676
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/zigman2/quotes/209891788/composite
US : U.S.: Nasdaq
$ 36.01
-0.80 -2.17%
Volume: 164,333
Jan. 27, 2023 4:00p
P/E Ratio
18.39
Dividend Yield
0.00%
Market Cap
$1.75 billion
Rev. per Employee
$251,090
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/zigman2/quotes/203077299/composite
US : U.S.: NYSE
$ 80.36
+0.92 +1.16%
Volume: 1.65M
Jan. 27, 2023 4:03p
P/E Ratio
110.72
Dividend Yield
N/A
Market Cap
$18.34 billion
Rev. per Employee
$1.48M
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/zigman2/quotes/203602448/composite
US : U.S.: Nasdaq
$ 497.35
-5.90 -1.17%
Volume: 33,170
Jan. 27, 2023 4:00p
P/E Ratio
14.14
Dividend Yield
0.40%
Market Cap
$4.72 billion
Rev. per Employee
$376,906
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/zigman2/quotes/206923834/composite
US : U.S.: NYSE
$ 68.74
+0.37 +0.54%
Volume: 1.23M
Jan. 27, 2023 4:00p
P/E Ratio
36.43
Dividend Yield
4.29%
Market Cap
$26.11 billion
Rev. per Employee
$1.27M
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/zigman2/quotes/204637140/composite
US : U.S.: NYSE
$ 21.57
+0.54 +2.57%
Volume: 1.13M
Jan. 27, 2023 4:00p
P/E Ratio
N/A
Dividend Yield
4.03%
Market Cap
$4.61 billion
Rev. per Employee
$3.18M
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/zigman2/quotes/200438029/composite
US : U.S.: NYSE
$ 34.32
+0.67 +1.99%
Volume: 5.08M
Jan. 27, 2023 4:00p
P/E Ratio
13.62
Dividend Yield
10.49%
Market Cap
$24.76 billion
Rev. per Employee
N/A
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Philip van Doorn covers various investment and industry topics. He has previously worked as a senior analyst at TheStreet.com. He also has experience in community banking and as a credit analyst at the Federal Home Loan Bank of New York.

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