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 two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.

One Stock to Sell:

BrightView (BV)

Trailing 12-Month GAAP Operating Margin: 5.9%

An official field consultant for Major League Baseball, BrightView (NYSE: BV) offers landscaping design, development, and maintenance.

Why Do We Steer Clear of BV?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.8% annually over the last two years
2. Earnings per share have contracted by 6.5% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
3. Low returns on capital reflect management’s struggle to allocate funds effectively

At $13.83 per share, BrightView trades at 15.6x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than BV.

Two Stocks to Buy:

Sea (SE)

Trailing 12-Month GAAP Operating Margin: 3.9%

Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.

Why Is SE a Top Pick?

1. 20.8% annual increases in its average revenue per user over the last two years show its platform is resonating with power users
2. Incremental sales over the last three years have been highly profitable as its earnings per share increased by 38.5% annually, topping its revenue gains
3. Free cash flow margin increased by 17.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders

Sea is trading at $128.09 per share, or 23.9x forward EV-to-EBITDA. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

Vertiv (VRT)

Trailing 12-Month GAAP Operating Margin: 17.3%

Formerly part of Emerson Electric, Vertiv (NYSE: VRT) manufactures and services infrastructure technology products for data centers and communication networks.

Why Should You Buy VRT?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 18.5% over the past two years
2. Free cash flow margin grew by 6.6 percentage points over the last five years, giving the company more chips to play with
3. Returns on capital are growing as management capitalizes on its market opportunities

Vertiv’s stock price of $87.03 implies a valuation ratio of 23.4x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.

While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out 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 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.