Even if a company is profitable, it doesn’t always mean it’s 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. That said, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
Comcast (CMCSA)
Trailing 12-Month GAAP Operating Margin: 16.7%
Formerly known as American Cable Systems, Comcast (NASDAQ:CMCSA) is a multinational telecommunications company offering a wide range of services.
Why Is CMCSA Risky?
- Demand for its offerings was relatively low as its number of domestic broadband customers has underwhelmed
- Free cash flow margin is forecasted to shrink by 4.2 percentage points in the coming year, suggesting the company will consume more capital to keep up with its competitors
- Returns on capital are increasing as management makes relatively better investment decisions
Comcast’s stock price of $29.76 implies a valuation ratio of 8x forward P/E. Dive into our free research report to see why there are better opportunities than CMCSA.
Two Stocks to Watch:
Sprouts (SFM)
Trailing 12-Month GAAP Operating Margin: 7.7%
Playing on the secular trend of healthier living, Sprouts Farmers Market (NASDAQ:SFM) is a grocery store chain emphasizing natural and organic products.
Why Do We Like SFM?
- Rapid rollout of new stores to capitalize on market opportunities makes sense given its strong same-store sales performance
- Same-store sales growth averaged 7.7% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Market share will likely rise over the next 12 months as its expected revenue growth of 8.7% is robust
Sprouts is trading at $71.10 per share, or 12.7x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Granite Construction (GVA)
Trailing 12-Month GAAP Operating Margin: 6.3%
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE:GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Why Are We Positive On GVA?
- Market share has increased this cycle as its 12.2% annual revenue growth over the last two years was exceptional
- Additional sales over the last two years increased its profitability as the 43% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin expanded by 5.3 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $120.65 per share, Granite Construction trades at 20.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Check out the high-quality names we’ve flagged in our Top 9 Market-Beating Stocks. 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 Kadant (+351% five-year return). Find your next big winner with StockStory today.