Operating leverage (OL) and profitability are interrelated determinants of stock returns. We show that the … alternative profitability measures that treat OL differently. Our results extend research linking monetary policy, OL, and … profitability by documenting important time-varying interrelations among these characteristics and returns …

We develop a firm valuation model with repeated expansion and contraction options to show operating profitability is a … as profitability falls, lowering the firm beta. Consistent with the predictions, operating profitability relates … losers with diverging operating profitability. Corroborating a risk-based explanation, the momentum results remain …

stock returns and that higher profitability and traditional value are both associated with higher chosen risk exposure …. Capital investment and utilization predict profitability and future returns. Empirically, utilization approximated by …

This paper investigates whether profitability skewness is related to expected stock return. We document significant … evidence that profitability skewness positively predicts cross-sectional stock returns, opposite to the negative relation … between return skewness and stock returns.The positive return predictability is robust to alternative proxies of profitability …

, profitability, and investment premiums. One duration-factor captures the spread of returns between short and long durations, and the …

We provide a novel framework and empirical results to understand the relation between profitability growth and returns …. By connecting a concave profit function to a standard valuation framework, we argue that if growth-rate risk carries a … positive risk premium, firms with higher current profitability growth should earn higher average returns but this effect should …

valuation. In our empirical application, we use 𝑄 to relate analyst forecasts to stock returns and measure the profitability of …

Current R&D expenditures forecast cash-based operating profitability up to three years in the future and sometimes as … profitability factor, and zero alphas. Capitalizing R&D to augment book values with intangible assets is unnecessary for asset … pricing, so long as expected profitability is explicitly recognized as a determinant of expected returns …