Companies with solid operating margins have a competitive edge, allowing them to reinvest for sustainable expansion. The best of these businesses balance profitability with reinvestment, setting themselves up for long-term success.
Even among profitable businesses, only a select few truly maximize their potential - and StockStory is here to help you find them. That said, here are three profitable companies that balance growth and profitability.
AutoZone (AZO)
Trailing 12-Month GAAP Operating Margin: 18.4%
Aiming to be a one-stop shop for the DIY customer, AutoZone (NYSE: AZO) is an auto parts and accessories retailer that sells everything from car batteries to windshield wiper fluid to brake pads.
Why Is AZO a Top Pick?
- Same-store sales growth lends it the confidence to gradually expand its store base so it can reach more customers
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 19.6%
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
At $3,398 per share, AutoZone trades at 22x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Construction Partners (ROAD)
Trailing 12-Month GAAP Operating Margin: 8%
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Why Is ROAD a Good Business?
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Additional sales over the last two years increased its profitability as the 53.7% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 6.5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Construction Partners’s stock price of $109.08 implies a valuation ratio of 38.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Republic Services (RSG)
Trailing 12-Month GAAP Operating Margin: 20%
Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.
Why Could RSG Be a Winner?
- Annual revenue growth of 10.2% over the last five years beat the sector average and underscores the unique value of its offerings
- Excellent operating margin of 18.9% highlights the efficiency of its business model, and its rise over the last five years was fueled by some leverage on its fixed costs
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute
Republic Services is trading at $213.02 per share, or 29.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in 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 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-micro-cap company Tecnoglass (+1,754% 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.
