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".

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 three profitable companies to avoid and some better opportunities instead.

Masco (MAS)

Trailing 12-Month GAAP Operating Margin: 17%

Headquartered just outside of Detroit, MI, Masco (NYSE: MAS) designs and manufactures home-building products such as glass shower doors, decorative lighting, bathtubs, and faucets.

Why Is MAS Risky?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Projected sales growth of 2.1% for the next 12 months suggests sluggish demand
3. Diminishing returns on capital suggest its earlier profit pools are drying up

Masco’s stock price of $65.11 implies a valuation ratio of 15.9x forward P/E. If you’re considering MAS for your portfolio, see our FREE research report to learn more.

Robert Half (RHI)

Trailing 12-Month GAAP Operating Margin: 2.5%

With roots dating back to 1948 as the first specialized recruiting firm for accounting and finance professionals, Robert Half (NYSE: RHI) provides specialized talent solutions and business consulting services, connecting skilled professionals with companies across various fields.

Why Do We Pass on RHI?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 9.4% annually over the last two years
2. Performance over the past five years shows each sale was less profitable, as its earnings per share fell by 11.6% annually
3. Waning returns on capital imply its previous profit engines are losing steam

Robert Half is trading at $28.34 per share, or 19.7x forward P/E. Read our free research report to see why you should think twice about including RHI in your portfolio.

TransUnion (TRU)

Trailing 12-Month GAAP Operating Margin: 18.6%

One of the three major credit bureaus in the United States alongside Equifax and Experian, TransUnion (NYSE: TRU) is a global information and insights company that provides credit reports, fraud prevention tools, and data analytics to help businesses make decisions and consumers manage their financial health.

Why Are We Hesitant About TRU?

1. Costs have risen faster than its revenue over the last five years, causing its adjusted operating margin to decline by 2.9 percentage points
2. Free cash flow margin dropped by 9.7 percentage points over the last five years, implying the company became more capital intensive as competition picked up
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities, and its shrinking returns suggest its past profit sources are losing steam

At $86.46 per share, TransUnion trades at 18.2x forward P/E. Dive into our free research report to see why there are better opportunities than TRU.

Stocks We Like More

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 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 (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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.