Operating margin by industry

94 U.S. industries, highest first · January 2026

Median industry12.1%half are above, half below

Highest43.5%Tobacco

Lowest-4.5%Electronics (Consumer & Office)

#	Industry	Operating margin	Net margin	Companies
1	Tobacco	43.5%	26.7%	10
2	Precious Metals	40.4%	28.6%	56
3	Retail (REITs)	40.3%	23.0%	26
4	Transportation (Railroads)	37.4%	24.7%	4
5	Semiconductor	35.3%	30.4%	66
6	Software (Entertainment)	33.9%	29.9%	77
7	Utility (Water)	33.7%	21.2%	14
8	Software (System & Application)	33.0%	25.5%	309
9	Drugs (Pharmaceutical)	29.5%	18.5%	228
10	Semiconductor Equipment	26.2%	21.3%	31
11	Oil/Gas Distribution	25.8%	13.4%	23
12	Investments & Asset Management	25.5%	18.4%	283
13	Oil/Gas (Production and Exploration)	25.4%	14.6%	142
14	REITs	24.6%	13.2%	190
15	Metals & Mining	23.8%	10.5%	73
16	Utility (General)	23.5%	14.2%	14
17	Beverage (Alcoholic)	22.8%	0.6%	14
18	Diversified	22.7%	16.4%	20
19	Computers/Peripherals	22.5%	17.8%	36
20	Real Estate (Development)	21.5%	7.0%	14
21	Power	21.5%	12.7%	46
22	Real Estate (General/Diversified)	21.4%	23.8%	12
23	Insurance (General)	21.3%	12.4%	21
24	Telecom (Wireless)	21.0%	12.2%	12
25	Telecom Equipment	20.7%	16.1%	57
26	Beverage (Soft)	20.5%	13.4%	27
27	Telecom Services	20.5%	14.2%	39
28	Green & Renewable Energy	19.9%	-10.8%	15
29	Hotel/Gaming	19.4%	10.4%	63
30	Household Products	18.6%	11.7%	110
31	Cable TV	18.5%	7.1%	9
32	Financial Services (Non-bank & Insurance)	18.5%	22.2%	176
33	Machinery	15.9%	10.6%	105
34	Restaurant/Dining	15.8%	9.4%	64
35	Healthcare Products	15.3%	9.6%	204
36	Insurance (Prop/Cas.)	15.3%	11.1%	57
37	Construction Supplies	15.2%	10.8%	40
38	Healthcare Information and Technology	14.7%	7.4%	115
39	Environmental & Waste Services	14.6%	8.2%	53
40	Education	14.0%	8.8%	32
41	Hospitals/Healthcare Facilities	13.4%	6.3%	31
42	Building Materials	12.6%	7.4%	41
43	Shipbuilding & Marine	12.6%	9.5%	8
44	Homebuilding	12.6%	9.5%	30
45	Broadcasting	12.3%	2.1%	24
46	Business & Consumer Services	12.3%	7.0%	155
47	Chemical (Specialty)	12.2%	2.9%	59
48	Retail (Building Supply)	11.9%	7.8%	14
49	Information Services	11.9%	6.5%	15
50	Oil/Gas (Integrated)	11.3%	8.3%	4
51	Office Equipment & Services	10.7%	4.4%	14
52	Food Processing	10.6%	2.8%	78
53	Insurance (Life)	10.6%	7.8%	20
54	Entertainment	10.6%	4.4%	92
55	Electronics (General)	10.4%	6.5%	114
56	Retail (Distributors)	10.1%	6.0%	62
57	Advertising	10.1%	-0.3%	52
58	Publishing & Newspapers	10.0%	8.2%	19
59	Recreation	9.7%	-4.7%	49
60	Packaging & Container	9.6%	4.5%	19
61	Electrical Equipment	9.5%	0.9%	112
62	Apparel	9.1%	3.9%	35
63	Shoe	9.0%	6.3%	11
64	Drugs (Biotechnology)	9.0%	-5.0%	496
65	Aerospace/Defense	8.6%	5.0%	79
66	Retail (Special Lines)	7.7%	5.2%	94
67	Transportation	7.6%	8.2%	19
68	Computer Services	7.4%	4.5%	64
69	Reinsurance	7.2%	3.9%	1
70	Trucking	6.9%	3.8%	26
71	Retail (General)	6.8%	5.6%	23
72	Furn/Home Furnishings	6.6%	1.1%	27
73	Engineering/Construction	6.5%	5.9%	48
74	Paper/Forest Products	6.3%	3.4%	6
75	Retail (Automotive)	6.2%	3.4%	34
76	Auto Parts	5.7%	0.7%	35
77	Farming/Agriculture	5.5%	3.9%	35
78	Air Transport	5.3%	2.5%	23
79	Oilfield Services/Equipment	4.7%	2.3%	97
80	Steel	4.1%	1.9%	19
81	Software (Internet)	3.7%	-0.9%	29
82	Chemical (Diversified)	3.3%	-5.3%	4
83	Healthcare Support Services	3.0%	1.3%	104
84	Real Estate (Operations & Services)	2.9%	1.2%	54
85	Chemical (Basic)	2.7%	-3.7%	29
86	Food Wholesalers	2.6%	1.2%	13
87	Auto & Truck	2.3%	1.3%	33
88	Retail (Grocery and Food)	2.3%	1.3%	15
89	Rubber & Tires	2.2%	-9.5%	3
90	Bank (Money Center)	0.0%	28.9%	15
91	Banks (Regional)	0.0%	27.5%	568
92	Brokerage & Investment Banking	0.0%	14.4%	32
93	Coal & Related Energy	-4.0%	-2.1%	16
94	Electronics (Consumer & Office)	-4.5%	-9.4%	8

Source: Aswath Damodaran, NYU Stern, January 2026. Aggregates over U.S. public companies.

Frequently asked questions

What is a good operating margin?

It depends on the industry: the median across these 94 industries is 12.1%, from Electronics (Consumer & Office) (-4.5%) to Tobacco (43.5%). Compare a business with its own industry, not with the overall average.

How is the operating margin calculated?

Operating income divided by revenue: what the business earns from its main work, before interest and tax. Each figure is an aggregate: the total across every company in the industry, so larger companies weigh more than in a simple average.

Where does the data come from?

Aswath Damodaran’s datasets at NYU Stern, January 2026, covering thousands of U.S. public companies in 94 industries. It is refreshed each January.