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. Keeping that in mind, here are two profitable companies that generate reliable profits without sacrificing growth and one that may face some trouble.
One Stock to Sell:
Hillman (HLMN)
Trailing 12-Month GAAP Operating Margin: 6.1%
Established when Max Hillman purchased a franchise operation, Hillman (NASDAQ: HLMN) designs, manufactures, and sells industrial equipment and systems for various sectors.
Why Is HLMN Not Exciting?
- Annual revenue growth of 1.6% over the last two years was below our standards for the industrials sector
- Subpar operating margin of 3.9% constrains its ability to invest in process improvements or effectively respond to new competitive threats
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $9.75 per share, Hillman trades at 17.7x forward P/E. Read our free research report to see why you should think twice about including HLMN in your portfolio.
Two Stocks to Buy:
Inspire Medical Systems (INSP)
Trailing 12-Month GAAP Operating Margin: 4.8%
Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE: INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.
Why Are We Backing INSP?
- Steady expansion of new domestic medical centers reflects a push to reach more customers in underpenetrated markets
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 22.5% annually
- Free cash flow margin grew by 31.8 percentage points over the last five years, giving the company more chips to play with
Inspire Medical Systems is trading at $87 per share, or 29.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
McKesson (MCK)
Trailing 12-Month GAAP Operating Margin: 1.2%
With roots dating back to 1833, making it one of America's oldest continuously operating businesses, McKesson (NYSE: MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
Why Do We Love MCK?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 15.3% annual sales growth over the last two years
- Enormous revenue base of $377.6 billion gives it economies of scale and advantages over new entrants due to the industry’s regulatory complexity
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 18.3% exceeded its revenue gains over the last five years
McKesson’s stock price of $671.61 implies a valuation ratio of 17.4x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 5 Growth Stocks for this month. 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
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