Wednesday, August 06, 2014

Stocks with the Best Income per Employee

A few days ago, I wrote about the Revenue per Employee Ratio. Today I'm writing about the Net Income per Employee. It is one thing for a company to generate a lot of sales, but investors are looking for stocks that generate a profit.

To calculate the Income per Employee, also known as the Profit per Employee, you take the net income that the company had for the latest quarter and divide that number by the number of employees. The higher the number, the greater the profits that are generated by each employee on average. It is another way of looking at the efficiency of companies and comparing stocks.

If you look at the technology sector, you can see some interesting comparisons. Here are some examples:

Advanced Micro Devices(AMD)$7,591 

The above is shown in the order of Revenues per Employee which was shown in the original article, to give you an idea of how the Income per Employee compares. As you can see, the first four, Apple, Facebook, Google, and Microsoft, are in the same order for both Revenues per Employees and Income per Employee.

Over the last 12 months, the Apple stock price, in first place, is up 50.9% and Facebook, in second place. is up 93.0%. 

If you like interesting stock lists like this, check out

Disclosure: Author owns AAPL, MSFT, AMZN, YHOO, EBAY, INTC



Anonymous said...

The companies with the worst statistics have the most room to improve. So one never knows whether to invest in the best or the worst?

Stockerblog said...

That may be true in regards to Income per Employee since a lot of companies don't have earnings when they first go public. But for the Revenues per Employee ratio, when comparing companies in the same industry, if they have the worst statistics, there is something wrong.