Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. That said, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
Expeditors (EXPD)
Trailing 12-Month GAAP Operating Margin: 9.8%
Expeditors (NYSE:EXPD) offers air and ocean freight as well as brokerage services.
Why Should You Dump EXPD?
Products and services are facing significant end-market challenges during this cycle as sales have declined by 21.2% annually over the last two years
Earnings per share have contracted by 16.6% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
Waning returns on capital imply its previous profit engines are losing steam
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE:AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Why Should AZO Be on Your Watchlist?
Same-store sales provide a solid foundation for the steady expansion of its stores
Differentiated product assortment is reflected in its best-in-class gross margin of 53%
Strong free cash flow margin of 11.1% enables it to reinvest or return capital consistently
The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.
Why Do We Love BMI?
Impressive 20% annual revenue growth over the last two years indicates it’s winning market share this cycle
Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 36.6% annually
Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate.
Take advantage of Mr. Market by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.
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