Even if a company is profitable, it doesn’t always mean it’s a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are two profitable companies that balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
Helix Energy Solutions (HLX)
Trailing 12-Month GAAP Operating Margin: 3.4%
Playing a pivotal role in the 2010 Macondo oil spill response with its Q4000 vessel, Helix Energy Solutions (NYSE:HLX) provides specialized services to extend the life of offshore oil and gas wells and decommission aging infrastructure.
Why Do We Think Twice About HLX?
- Smaller revenue base of $1.30 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Gross margin of 11.4% reflects its high production costs and unfavorable asset base
Helix Energy Solutions’s stock price of $9.87 implies a valuation ratio of 22.5x forward P/E. Read our free research report to see why you should think twice about including HLX in your portfolio.
Two Stocks to Watch:
Custom Truck One Source (CTOS)
Trailing 12-Month GAAP Operating Margin: 8%
Inspired by a family gas station, Custom Truck One Source (NYSE:CTOS) is a distributor of trucks and heavy equipment.
Why Are We Fans of CTOS?
- Impressive 14.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Operating profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 41% exceeded its revenue gains over the last two years
Custom Truck One Source is trading at $11.10 per share, or 50.1x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
AMETEK (AME)
Trailing 12-Month GAAP Operating Margin: 25.9%
Started from its humble beginnings in motor repair, AMETEK (NYSE:AME) manufactures electronic devices used in industries like aerospace, power, and healthcare.
Why Is AME Interesting?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 9.8% annual sales growth over the last five years
- Excellent operating margin of 25.4% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Robust free cash flow margin of 21.7% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
At $251.32 per share, AMETEK trades at 29.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.