Industries with the Highest Profit Margin in the US in 2020

1. Agricultural Insurance

Profit Margin 2020: 66.7%

Revenue from earned premiums for the Agricultural Insurance industry declined over the five years to 2020, despite increases in insured acreage. Industry premiums declined due to declines in the prices of key commodities, such as soybeans and corn. Industry operators primarily provide crop insurance, which protects against the loss of crops due to natural disasters, as well as the loss of revenue due to declines in agricultural commodity prices. The federal government is heavily involved in the industry, subsidizing farmers' insurance premiums and providing reinsurance to industry operators. Losses among various types of crops and in various geographies are often... Learn More

2. Trusts & Estates in the US

Profit Margin 2020: 65.5%

The Trusts and Estates industry is composed of trusts, estates and agency accounts administered on behalf of beneficiaries under the terms established in a fiduciary contract. Industry revenue, composed primarily of capital gains on trusted assets and ordinary dividends, exhibited substantial growth over the five years to 2020. The industry benefited from substantial yields in equity and fixed income markets in addition to appreciation in house prices. Overall, revenue is expected to rise at an annualized rate of 3.9% to $193.9 billion over the five years to 2020. Revenue is expected to decline 1.0% in 2020, however, due to the... Learn More

3. Commercial Leasing in the US

Profit Margin 2020: 50.3%

Operators in the Commercial Leasing industry serve as lessors of buildings for nonresidential purposes. Industry participants include owner-lessors of nonresidential buildings, establishments that rent real estate and then act as lessors in subleasing it, and establishments that provide full-service office space. Over the five years to 2020, increased per capita disposable income encouraged more businesses to enter the market. Moreover, incumbent businesses are inclined to increase their production and inventory levels to tap on the growing consumer demand, thus demanding more space. However, declining corporate profit has partially dampened demand for commercial leasing, as a result of lower confidence in... Learn More

4. Land Leasing in the US

Profit Margin 2020: 45.4%

Over the five years to 2020, operators in the Land Leasing industry have experienced steady revenue growth. Industry operators rent out land for residential or commercial purposes, generating the majority of their revenue by leasing land to owners of manufactured homes. Participants range from individuals who rent out small plots of land to large companies that manage entire land lease communities. Manufactured homes are relatively inexpensive, and therefore, leasing arrangements offer a more affordable alternative to traditional on-site housing. With an increase in price for single-family conventional homes and apartment rental rates over the past five years, manufactured home properties... Learn More

5. Operating Systems & Productivity Software Publishing in the US

Profit Margin 2020: 42.1%

Operators in the Operating Systems and Productivity Systems Software Publishing industry develop and publish operating systems and productivity software products that are necessary for computer usability. Industry software often comes preinstalled on new computers, which means industry revenue is correlated with new computer sales. As computer products have become more intertwined with daily life over the five years to 2020, industry demand has grown. As a result, total industry revenue has expanded as sales to both consumers and businesses increased, driven by rising disposable income levels and extensive private investment in computers and software. Overall, industry revenue has grown at... Learn More

6. Private Equity, Hedge Funds & Investment Vehicles in the US

Profit Margin 2020: 41.2%

The Private Equity, Hedge Funds and Investment Vehicles industry consists of funds that raise capital to invest in various asset classes. Industry assets have become increasingly integral to institutional investors' portfolios and the larger asset-management market. Institutional investors are individuals or organizations that trade securities in such substantial volumes that they qualify for lower commissions and fewer protective regulations since they are assumed to be knowledgeable enough to protect themselves. Increasing demand from institutional investors has contributed to the surge in the industry's assets under management (AUM) and revenue during the early portion of the period. To a lesser extent,... Learn More

7. Cigarette & Tobacco Manufacturing in the US

Profit Margin 2020: 40.3%

Operators in the Cigarette and Tobacco Manufacturing industry produce a variety of tobacco products, including cigarettes, cigars and smokeless tobacco (excluding electronic cigarettes). Since the 1980s, the percentage of smokers in the United States has steadily declined, while excise tax on tobacco has increased; however, the industry continues to adapt to these increasingly challenging conditions. Operators experience significant brand loyalty and are, thus, able to pass on higher excise taxes and compliance costs to consumers in the form of higher selling prices. In turn, price markups often offset declining unit sales of cigarettes, which generate more than 80.0% of industry... Learn More

8. Social Networking Sites

Profit Margin 2020: 36.2%

Since going mainstream over a decade ago, hundreds of millions of Americans have embraced social networking websites; from Facebook and Twitter to LinkedIn and dozens more, people use these networks maintain relationships with friends, follow the news and share photos and videos. By leveraging user data for targeted advertisements, where the supermajority of revenue is derived, operators in the Social Networking Sites industry have been able to capitalize on the popularity of their platforms. Over the five years to 2020, the industry is expected to surge at an annualized rate of 25.7% to $52.7 billion. The industry has benefited from... Learn More

9. Gas Pipeline Transportation in the US

Profit Margin 2020: 36.1%

Operators in the Gas Pipeline Transportation industry transport natural gas from processing plants to local distribution systems using pipelines. The industry has encountered various conditions over the five years to 2020. Altogether, natural gas consumption has risen, spurring greater production volumes and demand for industry services. However, oil price declines have ignited demand for competing oil transporters as a natural gas substitute during the period, despite falling natural gas prices. Altogether, industry revenue has increased at an annualized rate of 3.9% to $33.4 billion over the five years to 2020, including a decline of 4.7% in 2020 alone. This is... Learn More

10. Portfolio Management in the US

Profit Margin 2020: 35.7%

The Portfolio Management industry has experienced countervailing trends over the five years to 2020. Industry operators manage asset portfolios for a fee or commission. For the majority of the period, rising assets under management (AUM) as a result of rising asset prices and growing disposable income has increased the base of assets industry operators charge fees on. However, increased investor preference for passive asset management, including through exchange-traded funds (ETFs), has driven expenses charged for the management of assets down during the period.

Financial markets play an integral role in AUM growth and, consequently, base and performance fees earned by managers.... Learn More