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:

Apple	(AAPL)	$480,137
Facebook	(FB)	$375,730
Google	(GOOG)	$245,447
Microsoft	(MSFT)	$226,535
Amazon	(AMZN)	$1,535
Cisco	(CSCO)	$104,935
Advanced Micro Devices	(AMD)	$7,591
eBay	(EBAY)	($4,667)
Dell	(DELL)	$12,239
Intel	(INTC)	$95,892
LinkedIn	(LNKD)	($4,001)
Yahoo	(YHOO)	$105,738
Hewlett-Packard	(HPQ)	$17,329
Oracle	(ORCL)	$96,661

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 WallStreetNewsNetwork.com.

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

By Stockerblog.com

Stocks with the Best Sales per Employee

Years ago, I wrote about the Sales per Employee Ratio, back in 2007, and again a more comprehensive article in 2009, also referred to as the Revenue per Employee Ratio. It's actually a fairly simple ratio to calculate. You take the total revenues that the company had for the latest quarter and divide that number by the number of employees. The higher the number, the greater the revenues that are generated by each employee on average. It is one way of looking at the efficiency of the company.

I heard about this ratio when I was hearing a presentation from a small telecom company a long time ago, and they were comparing themselves to AT&T (T). The small telecom said that the company was generating thousands of dollars more in revenue per employee and therefore more productive than the big blue chip telecom. It's an interesting concept that can be used to compare stocks.

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

Apple	(AAPL)	$2,218,481
Facebook	(FB)	$1,580,085
Google	(GOOG)	$1,172,017
Microsoft	(MSFT)	$841,889
Amazon	(AMZN)	$697,016
Cisco	(CSCO)	$628,949
Advanced Micro Devices	(AMD)	$551,776
eBay	(EBAY)	$525,746
Dell	(DELL)	$517,578
Intel	(INTC)	$501,051
LinkedIn	(LNKD)	$484,973
Yahoo	(YHOO)	$395,016
Hewlett-Packard	(HPQ)	$352,189
Oracle	(ORCL)	$329,574

You would normally think that manufacturing companies would naturally have a lower Sales per Employee ratio that software or Internet company. Hewlett-Packard (HPQ) is a perfect example, which is one of the lowest on the list. However, Apple (AAPL) which is primarily a manufacturing company is at the top of the list. Cisco (CSCO), which is also in manufacturing is near the top.

Software you would expect to see higher on the list, such as Microsoft (MSFT), which is number 4. However, Oracle (ORCL), which is also a software company is at the bottom of the list.

What about returns? If you look at the top two, Apple is up 50.9% over the last 12 months, and Facebook is up 93.0%. If you look at the bottom two, Hewlett-Packard is up only 37.0% and Oracle is up only 22.5%. Maybe the Sales per employee ratio warrants a closer look.

If you like interesting stock lists like this, check out WallStreetNewsNetwork.com.

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

By Stockerblog.com

Why Doesn't the Revenues per Employee Ratio (R/E Ratio) Get More Respect?

One obscure way of measuring how efficient a company operates is the amount or sales or revenues that are generated for each employee at the company, also known as the Revenues per Employee Ratio or R/E Ratio. It is also sometimes referred to as the Sales per Employee Ratio or S/E ratio. I've written about the R/E ratio in the past a couple times, but there doesn't appear to be much interest in this metric.

The concept is simple. Let's assume there are two companies in the same industry generating the exact same amount of revenues. But Company A has 1,000 employees and Company B has 10,000 employees. Which company do you think would generate higher net earnings? Which stock do you think would perform better?

Let's take some real life examples, using the technology sector. With only 19,665 employees and raking in $182.95 billion in revenues, Google (GOOG) is by far the top large cap tech company with the highest R/E ratio at $9,303,330 for every employee. And to top things off, the stock is up 79% so far this year. Apple (AAPL) is close behind with an R/E ratio of $5,408,163 and the stock is up an amazing 127% for the year. Then there is Amazon (AMZN) at $2,746,376 per employee. Amazon has a top return year-to-date of 142%.

Now let's look at some of the tech stocks that don't have as high an R/E ratio. Yahoo (YHOO) has a revenue per employee ratio far below the others at $1,646,323 and the stock was only up 24%. Both Dell (DELL) and IBM (IBM) generate almost identical revenues per employee at $410,000 and are up about 49% for the year; not even close to the returns for Apple or Amazon. And Hewlett Packard (HPQ) only has a R/E ratio of $372,866 and has the lower year-to-date return to show for it at 38%.

So next time you are trying to decide which stock you want to buy in a particular industry or sector, take a close look at the R/E ratio.

Author owns AAPL, AMZN, and YHOO.

By Fred Fuld at Stockerblog.com