Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 struggle to keep up.
One Stock to Sell:
Graham Corporation (GHM)
Trailing 12-Month GAAP Operating Margin: 6.1%
Founded when its founder patented a unique design for a vacuum system used in the sugar refining process, Graham (NYSE: GHM) provides vacuum and heat transfer equipment for the energy, petrochemical, refining, and chemical sectors.
Why Are We Hesitant About GHM?
- Subpar operating margin of 2.3% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Underwhelming 3.1% return on capital reflects management’s difficulties in finding profitable growth opportunities
- Short cash runway increases the probability of a capital raise that dilutes existing shareholders
Graham Corporation’s stock price of $60.99 implies a valuation ratio of 39.4x forward P/E. Dive into our free research report to see why there are better opportunities than GHM.
Two Stocks to Buy:
Robinhood (HOOD)
Trailing 12-Month GAAP Operating Margin: 47.6%
With a mission to democratize finance, Robinhood (NASDAQ: HOOD) is an online consumer finance platform known for its commission-free stock and crypto trading.
Why Will HOOD Beat the Market?
- Customer spending is rising as the company has focused on monetization over the last two years, leading to 47.7% annual growth in its average revenue per user
- Additional sales over the last three years increased its profitability as the 58.5% annual growth in its earnings per share outpaced its revenue
- Robust free cash flow margin of 49.6% gives it many options for capital deployment, and its growing cash flow gives it even more resources to deploy
At $131.67 per share, Robinhood trades at 36.7x forward EV/EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Raymond James (RJF)
Trailing 12-Month GAAP Operating Margin: 19.7%
Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE: RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.
Why Will RJF Outperform?
- 12% annual revenue growth over the last five years surpassed the sector average as its products resonated with customers
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Impressive 14.4% annual tangible book value per share growth over the last two years indicates it’s building equity value this cycle
Raymond James is trading at $165.91 per share, or 13.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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