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 best left off your watchlist.
One Stock to Sell:
Stifel (SF)
Trailing 12-Month GAAP Operating Margin: 18.7%
Tracing its roots back to 1890 when the firm was established in St. Louis, Stifel Financial (NYSE: SF) is a financial services firm that provides wealth management, investment banking, and institutional brokerage services to individuals, corporations, and institutions.
Why Does SF Worry Us?
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 9% annually
- 6.1% annual book value per share growth over the last two years was slower than its financials peers
At $124.69 per share, Stifel trades at 13.3x forward P/E. To fully understand why you should be careful with SF, check out our full research report (it’s free for active Edge members).
Two Stocks to Watch:
Limbach (LMB)
Trailing 12-Month GAAP Operating Margin: 8%
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Why Do We Like LMB?
- Operating margin improved by 6 percentage points over the last five years as it eliminated redundant costs
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 42.5% annually, topping its revenue gains
- Free cash flow margin grew by 8 percentage points over the last five years, giving the company more chips to play with
Limbach is trading at $74.89 per share, or 17.5x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free for active Edge members.
Cardinal Health (CAH)
Trailing 12-Month GAAP Operating Margin: 1%
Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.
Why Does CAH Stand Out?
- Dominant market position is represented by its $234.3 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Sales outlook for the upcoming 12 months calls for 12.1% growth, an acceleration from its two-year trend
- Earnings growth has comfortably beaten the peer group average over the last five years as its EPS has compounded at 9.4% annually
Cardinal Health’s stock price of $198.78 implies a valuation ratio of 20x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
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 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 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
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