The Most Profitable Industries for the Next Three Years

Oil drilling as profitable industryWith the financial crisis, the Great Recession and the global economic slowdown wreaking havoc on every sector over the last two years, it's hard to imagine any industry that escaped unscathed. However, IBISWorld Research has uncovered five industries that have managed to remain extremely profitable during 2010 -- and these industries are their picks to be the most profitable for the next three years as well.

Not surprisingly, four of the five industries with the fattest profit margins are connected to the mining of natural resources, such as crude oil and precious metals like gold. Companies in these industries have an opportunity to flourish as these areas grow. And investors who take their cues from these industries may be able to boost the profit margins of their portfolios as well.

Mining Support -- The need to produce energy and raw materials has this industry reaping a 66% profit margin coming out of the recession. The run-up in prices for oil, gold and other minerals means companies that engage in the mining and exploration of commodities will continue to benefit as long as demand stays high.

The depressed economic environment has given this industry another edge as well. "Ultimately what brings this industry its high profit margin is that wages only account for about 22% of revenue," says IBISWorld senior industry analyst Toon van Beeck.

Companies that should benefit most from the industry's good fortune include Halliburton (HAL), which holds a 9% share of the market, Key Energy Services (KEG), Diamond Offshore Drilling (DO) and Noble (NE).

Psychologists, Social Workers and Marriage Counselers
-- No doubt much of the misery caused by the Great Recession, has led to this industry's 65% profit margin. Tough times increase demand for these types of professional services, and the industry has low startup costs and is largely composed of single practitioners. These small businesses can quickly become licensed, set up their own shop, set competitive pricing in most cases and keep most of the profits for themselves.

Gold and Silver Ore Mining – With gold now trading at record prices above $1,300 an ounce, it's no wonder this industry has enjoyed a 62% profit margin. While gold will likely remain in high demand for years to come, IBISWorld believes there may be too much demand on the investment side, which could hurt profits if investors flee quickly.

"We anticipate a pullback in the price of gold, but it's still going to remain a very profitable industry," says van Beeck.

And as long as the gold rush continues, market leaders Newmont Mining (NEM), Barrick Gold (ABX), Kinross Gold (KGC) and Rio Tinto (RTP) will likely benefit the most.

Copper, Nickel, Lead and Zinc Mining
– Demand for copper for industrial uses continues to fuel the industry's 56% profit margin. Prices for copper and these other metals are at or near all-time highs, and profits should continue to increase as economies around the world pull themselves out of recession.

"Demand for these core metals is going to push prices up and push the overall profit margins for these companies higher," says van Beeck.

Look for Freeport-McMoRan Copper & Gold (FCX), which has a 42% share of the market, to benefit most, with Rio Tinto (RTP), and Teck Cominco (TCK) also joining in.

Oil Drilling and Gas Extraction – BP's (BP) disaster in the Gulf of Mexico didn't appear to hurt this industry too much as it produced a 48% profit margin. Profits from oil selling at $75 to $80 a barrel are hard to beat, and IBISWorld sees oil prices trending up toward $100 a barrel within three years.

Ironically, BP will continue to dominate this sector along with ConocoPhillips (COP), Chevron Corporation (CVX), Exxon Mobil (XOM) and Royal Dutch/Shell Group (RDSA).

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There is nothing "quick" about getting licensed as a mental health professional. If you haven't yet graduated with an approved advanced degree and gone on to complete several years of supervised post-graduate experience don't bother applying for the state licensing exams.

October 11 2010 at 1:27 AM Report abuse rate up rate down Reply

gold is getting out of reach for the average person to buy in coin or bullion form, about $1,460.00 a oz with the dealer making a few bucks for the sale, SPOT price is $1,345.00 a oz. also selling price. If you bought gold ozs in raw form at 1 grand a coin you can make 345.00 profit per coin today. Hold on to them and make 800.00 per coin or bar soon it will be higher. Pladdium was the best buy only 5 months ago you could buy it at 375.00 per oz. and now spot price is 560.00 AROUND THERE and going up it will top at 1 grand a oz. buy now and make ABOUT 400 bucks a oz in the next YEAR. not a bad SHORT investment.

October 11 2010 at 12:48 AM Report abuse rate up rate down Reply

silver in stocks and bars and coins is today still a cheap investment, about $24.00 bucks a oz. for core price and a % over that for the dealer or seller. Even if you pay 27,28,29, bucks a coin or bar in raw form 99.99 fine. IT will double in a few short can sell for double your money you paid out on each item. Its still at a good price to buy for the small investor wanting to make a few extra bucks, but it will not be that price for long its going up 25 cents to 50cents a oz every couple days, it will be at 50 bucks a oz or higher really soon.

October 11 2010 at 12:39 AM Report abuse rate up rate down Reply

The richest president in the USA was one that when he was in and left the white house after a depression bought silver minning stocks , super cheap, when they were low and reaped a few billion dollors, he became the richest president in USA history. Google richest presidents now and past to see his story.

October 11 2010 at 12:32 AM Report abuse +1 rate up rate down Reply

Invest in Rocket Company Stock... It's bound to go up! Sorry, I couldn't resist the temptation. Seriously, doesn't almost everything related to hard assets and commodities stand to benefit as the major nations of the world debase their currencies in a race to the bottom with them? Natural resources, and the companies/nations that control their production are in the catbird's seat in this economic environment, but can you buy into them at a good price?

October 10 2010 at 12:17 PM Report abuse +2 rate up rate down Reply

Please, spell counselor right!

October 08 2010 at 7:35 PM Report abuse rate up rate down Reply

Bookkeepers and accountants will be in great demand. Once the Obamacare is 100% enforced, the new regulation requiring businesses to start issuing 1099's, these specialists will be in great demand to make sure the regulations are followed. Profitable businesses in the future will be CPA firms which will intergrate qualified bookkeepers within their corporate structure. President Obama mentioned the need to push through the regulations asap. If anything needed to be fine tuned lawyers will be hired to correct any problems caused. This means, major billable hours for attorneys and their staff. CPA then Law school specialists!!! These will be the next large corporate structures in the future.

October 08 2010 at 4:13 PM Report abuse +2 rate up rate down Reply

Anyone who can feed people.

October 08 2010 at 11:28 AM Report abuse +1 rate up rate down Reply

Does it surprise anyone that energy (petroleum) comapnies are going to benefit the most over the nesxt few years? When a handful of corporate entities control the dwindling supply they can demand anything that the market will bear. It is enen better when they have the economic clout to prevent alternative energy sources from being developed.

October 08 2010 at 8:41 AM Report abuse -1 rate up rate down Reply
2 replies to otterdad48's comment

How would they prevent alternative energy sources from being developed?

October 08 2010 at 1:16 PM Report abuse rate up rate down Reply


October 08 2010 at 7:17 AM Report abuse +3 rate up rate down Reply