Profitable companies tend to be more resilient, giving them the flexibility to invest and return capital to shareholders. Businesses that consistently generate earnings can better navigate downturns and capitalize on new opportunities.
Identifying the most compelling profitable companies isn’t always straightforward, and that’s why we started StockStory. Keeping that in mind, here are three profitable companies that balance growth and profitability.
Kratos (KTOS)
Trailing 12-Month GAAP Operating Margin: 1.7%
Established with a commitment to supporting national security, Kratos (NASDAQ: KTOS) is a provider of advanced engineering, technology, and security solutions tailored for critical national security applications.
Why Do We Watch KTOS?
- Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 14.6% over the past two years
- Exciting sales outlook for the upcoming 12 months calls for 30.6% growth, an acceleration from its two-year trend
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 15.8% annually
Kratos is trading at $54.76 per share, or 65x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
ADP (ADP)
Trailing 12-Month GAAP Operating Margin: 26.5%
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
Why Should You Buy ADP?
- Annual revenue growth of 8.1% over the last five years beat the sector average and underscores the unique value of its offerings
- Dominant market position is represented by its $21.6 billion in revenue and gives it fixed cost leverage when sales grow
- ADP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy
ADP’s stock price of $221.85 implies a valuation ratio of 17.9x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Motorola Solutions (MSI)
Trailing 12-Month GAAP Operating Margin: 24.7%
Born from the company that invented the first portable handheld police radio in 1940, Motorola Solutions (NYSE: MSI) provides mission-critical communications, video security, and command center software solutions for public safety agencies and enterprise customers.
Why Is MSI a Good Business?
- Market share has increased this cycle as its 9.5% annual revenue growth over the last five years was exceptional
- Adjusted operating margin expanded by 5.3 percentage points over the last five years as it scaled and became more efficient
- Robust free cash flow margin of 19.2% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business
At $407.24 per share, Motorola Solutions trades at 22.8x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
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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.
