2 Profitable Stocks on Our Watchlist and 1 to Turn Down

While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".

Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here are two profitable companies that generate reliable profits without sacrificing growth and one that may face some trouble.

One Stock to Sell:

Dun & Bradstreet (DNB)

Trailing 12-Month GAAP Operating Margin: 8.9%

Known for its proprietary D-U-N-S Number that serves as a unique identifier for businesses worldwide, Dun & Bradstreet (NYSE:DNB) provides business decisioning data and analytics that help companies evaluate credit risks, verify suppliers, enhance sales productivity, and gain market visibility.

Why Is DNB Risky?

1. 3.7% annual revenue growth over the last two years was slower than its business services peers
2. Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 5 percentage points
3. Flat earnings per share over the last four years lagged its peers

Dun & Bradstreet’s stock price of $9.02 implies a valuation ratio of 8.4x forward P/E. If you’re considering DNB for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Ingersoll Rand (IR)

Trailing 12-Month GAAP Operating Margin: 18%

Started with the invention of the steam drill, Ingersoll Rand (NYSE:IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.

Why Do We Like IR?

1. Operating margin expanded by 13 percentage points over the last five years as it scaled and became more efficient
2. Incremental sales over the last five years have been highly profitable as its earnings per share increased by 17.2% annually, topping its revenue gains
3. IR is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy

At $83.05 per share, Ingersoll Rand trades at 23.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

DexCom (DXCM)

Trailing 12-Month GAAP Operating Margin: 15.3%

Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ:DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.

Why Is DXCM a Good Business?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 19.2% over the past two years
2. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 23.2% outpaced its revenue gains
3. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures

DexCom is trading at $86.15 per share, or 39.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like 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 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.