LKQ Return On Equity vs. Operating Margin
| LKQ1 Stock | EUR 37.00 0.20 0.54% |
For LKQ profitability analysis, we use financial ratios and fundamental drivers that measure the ability of LKQ to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well LKQ Corporation utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between LKQ's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of LKQ Corporation over time as well as its relative position and ranking within its peers.
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LKQ Corporation Operating Margin vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining LKQ's current stock value. Our valuation model uses many indicators to compare LKQ value to that of its competitors to determine the firm's financial worth. LKQ Corporation is currently regarded as number one stock in return on equity category among its peers. It also is currently regarded as number one stock in operating margin category among its peers reporting about 0.56 of Operating Margin per Return On Equity. The ratio of Return On Equity to Operating Margin for LKQ Corporation is roughly 1.80 . 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 LKQ's earnings, one of the primary drivers of an investment's value.LKQ Operating Margin vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
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For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
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.
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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.
LKQ Operating Margin Comparison
LKQ is currently under evaluation in operating margin category among its peers.
LKQ Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in LKQ, profitability is also one of the essential criteria for including it into their portfolios because, without profit, LKQ will eventually generate negative long term returns. The profitability progress is the general direction of LKQ's change in net profit over the period of time. It can combine multiple indicators of LKQ, 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.
LKQ Corporation, together with its subsidiaries, distributes replacement parts, components, and systems used in the repair and maintenance of vehicles in North America, Europe, and Taiwan. LKQ Corporation was founded in 1998 and is headquartered in Chicago, Illinois. LKQ operates under Auto Parts classification in Germany and traded on Frankfurt Stock Exchange. It employs 43000 people.
LKQ Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on LKQ. 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 LKQ 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 LKQ's important profitability drivers and their relationship over time.
Use LKQ 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 LKQ 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 LKQ will appreciate offsetting losses from the drop in the long position's value.LKQ Pair Trading
LKQ Corporation Pair Trading Analysis
The ability to find closely correlated positions to LKQ could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace LKQ 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 LKQ - 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 LKQ Corporation to buy it.
The correlation of LKQ 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 LKQ moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if LKQ Corporation 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 LKQ 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.Use Investing Themes to Complement your LKQ position
In addition to having LKQ in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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Additional Information and Resources on Investing in LKQ Stock
When determining whether LKQ Corporation is a good investment, qualitative aspects like company management, corporate governance, and ethical practices play a significant role. A comparison with peer companies also provides context and helps to understand if LKQ Stock is undervalued or overvalued. This multi-faceted approach, blending both quantitative and qualitative analysis, forms a solid foundation for making an informed investment decision about Lkq Corporation Stock. Highlighted below are key reports to facilitate an investment decision about Lkq Corporation Stock:Check out Correlation Analysis. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
To fully project LKQ's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of LKQ Corporation 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 LKQ's income statement, its balance sheet, and the statement of cash flows.