Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
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 struggle to keep up.
One Stock to Sell:
Donaldson (DCI)
Trailing 12-Month GAAP Operating Margin: 13.8%
Playing a vital role in the historic Apollo 11 mission, Donaldson (NYSE:DCI) manufacturers and sells filtration equipment for various industries.
Why Does DCI Fall Short?
- Muted 4.2% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Estimated sales growth of 3.8% for the next 12 months is soft and implies weaker demand
At $109.05 per share, Donaldson trades at 3.3x forward price-to-sales. If you’re considering DCI for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
Wingstop (WING)
Trailing 12-Month GAAP Operating Margin: 25.5%
The passion project of two chicken wing aficionados in Texas, Wingstop (NASDAQ:WING) is a popular fast-food chain known for its flavorful and crispy chicken wings offered in a variety of sauces and seasonings.
Why Should You Buy WING?
- Average same-store sales growth of 11.9% over the past two years indicates its restaurants are resonating with diners
- Excellent operating margin of 25.7% highlights the efficiency of its business model
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Wingstop is trading at $264.55 per share, or 60.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Morningstar (MORN)
Trailing 12-Month GAAP Operating Margin: 22.3%
Founded in 1984 by Joe Mansueto with just $80,000 in personal savings, Morningstar (NASDAQ:MORN) provides independent investment data, research, and analysis tools that help investors, advisors, and institutions make informed financial decisions.
Why Are We Bullish on MORN?
- Solid 12.3% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Share buybacks catapulted its annual earnings per share growth to 131%, which outperformed its revenue gains over the last two years
- ROE punches in at 15.6%, illustrating management’s expertise in identifying profitable investments
Morningstar’s stock price of $171.70 implies a valuation ratio of 16.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our 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 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.