A company with profits isn’t always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here are three profitable companies to steer clear of and a few better alternatives.

Domino's (DPZ)

Trailing 12-Month GAAP Operating Margin: 18.6%

Founded by two brothers in Michigan, Domino’s (NYSE: DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.

Why Does DPZ Fall Short?

1. Sales trends were unexciting over the last six years as its 5.2% annual growth was below the typical restaurant company
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 5.8%

Domino’s stock price of $447.01 implies a valuation ratio of 25.1x forward P/E. To fully understand why you should be careful with DPZ, check out our full research report (it’s free).

Energizer (ENR)

Trailing 12-Month GAAP Operating Margin: 11.4%

Masterminds behind the viral Energizer Bunny mascot, Energizer (NYSE: ENR) is one of the world's largest manufacturers of batteries.

Why Is ENR Not Exciting?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Estimated sales growth of 1.3% for the next 12 months is soft and implies weaker demand
3. Capital intensity has ramped up over the last year as its free cash flow margin decreased by 4.6 percentage points

Energizer is trading at $22.29 per share, or 6x forward P/E. If you’re considering ENR for your portfolio, see our FREE research report to learn more.

Masco (MAS)

Trailing 12-Month GAAP Operating Margin: 17.3%

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 Do We Steer Clear of MAS?

1. Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
2. Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

At $63.86 per share, Masco trades at 14.7x forward P/E. Check out our free in-depth research report to learn more about why MAS doesn’t pass our bar.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 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-micro-cap company Kadant (+351% 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.