3 High-Margin Businesses That Can Absorb Inflation
A business that has high margins has much more of a buffer to handle adversity and rising costs. If a company's cost of revenue is significant and leaves little of the top line left to cover overhead and other operating expenses, it can be difficult to consistently stay in the black.
A great example is Amazon, where cost of sales is normally 80% or more of revenue. When it battled rising costs last quarter, it posted its first loss in years.
Three companies that don't have that problem and that enjoy gross profit margins of at least 80% or better include Regeneron Pharmaceuticals (NASDAQ: REGN), Adobe (NASDAQ: ADBE), and Visa (NYSE: V).
Source Fool.com
