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. That said, here are two profitable companies that balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
Starbucks (SBUX)
Trailing 12-Month GAAP Operating Margin: 7.9%
Started by three friends in Seattle’s historic Pike Place Market, Starbucks (NASDAQ: SBUX) is a globally-renowned coffeehouse chain that offers a wide selection of high-quality coffee, beverages, and food items.
Why Do We Steer Clear of SBUX?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Estimated sales growth of 3% for the next 12 months implies demand will slow from its six-year trend
- Day-to-day expenses have swelled relative to revenue over the last year as its operating margin fell by 7.1 percentage points
Starbucks’s stock price of $89.22 implies a valuation ratio of 35.8x forward P/E. To fully understand why you should be careful with SBUX, check out our full research report (it’s free for active Edge members).
Two Stocks to Watch:
Procter & Gamble (PG)
Trailing 12-Month GAAP Operating Margin: 25.9%
Founded by candle maker William Procter and soap maker James Gamble, Proctor & Gamble (NYSE: PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.
Why Do We Watch PG?
- Dominant market position is represented by its $84.93 billion in revenue, which gives it negotiating power with suppliers and retailers
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 25.6%
- PG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Procter & Gamble is trading at $145.54 per share, or 20.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Boston Scientific (BSX)
Trailing 12-Month GAAP Operating Margin: 17.9%
Founded in 1979 with a mission to advance less-invasive medicine, Boston Scientific (NYSE: BSX) develops and manufactures medical devices used in minimally invasive procedures across cardiovascular, urological, neurological, and gastrointestinal specialties.
Why Are We Positive On BSX?
- Average organic revenue growth of 16.2% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 19.9% annually, topping its revenue gains
- Free cash flow margin expanded by 5.5 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $96.18 per share, Boston Scientific trades at 28.4x 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
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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 (+1,326% between June 2020 and June 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.
