1 Profitable Stock to Keep an Eye On and 2 We Turn Down

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here is one profitable company that leverages its financial strength to beat the competition and two best left off your watchlist.

Two Stocks to Sell:

Scorpio Tankers (STNG)

Trailing 12-Month GAAP Operating Margin: 39.4%

Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.

Why Do We Think Twice About STNG?

1. Performance surrounding its total vessels has lagged its peers
2. Forecasted revenue decline of 1.5% for the upcoming 12 months implies demand will fall even further
3. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term

Scorpio Tankers is trading at $73.21 per share, or 12.5x forward P/E. If you’re considering STNG for your portfolio, see our FREE research report to learn more.

Diebold Nixdorf (DBD)

Trailing 12-Month GAAP Operating Margin: 6.4%

With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE:DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.

Why Do We Pass on DBD?

1. Sales stagnated over the last five years and signal the need for new growth strategies
2. Cash burn makes us question whether it can achieve sustainable long-term growth
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $82.61 per share, Diebold Nixdorf trades at 14.6x forward P/E. Dive into our free research report to see why there are better opportunities than DBD.

One Stock to Watch:

Stryker (SYK)

Trailing 12-Month GAAP Operating Margin: 19.5%

With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE:SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.

Why Is SYK Interesting?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 10.2% over the past two years
2. $25.12 billion in revenue gives its scale, which leads to bargaining power with customers because there are few trusted alternatives
3. Incremental sales over the last five years have been more profitable as its earnings per share increased by 12.9% annually, topping its revenue gains

Stryker’s stock price of $382.64 implies a valuation ratio of 25.4x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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