when comparing similar companies be wary of unusually high profit margins a closer investigation of the financials may reveal that the current margin was inflated by a one off event and isn t sustainable 
examples of low profit margin industriesoperation intensive businesses like transportation that may have to deal with fluctuating fuel prices drivers perks and retention and vehicle maintenance usually have lower profit margins agriculture based ventures often also fall into this category owing to weather uncertainty high inventory operational overheads the need for farming and storage space and resource intensive activities automotive is another sector known for low profit margins automakers profits and sales are limited by intense competition uncertain consumer demand and high operational expenses involved in developing dealership networks and logistics 