Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
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 generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Crown Holdings (CCK)
Trailing 12-Month GAAP Operating Margin: 12.6%
Formerly Crown Cork & Seal, Crown Holdings (NYSE: CCK) produces packaging products for consumer marketing companies, including food, beverage, household, and industrial products.
Why Do We Think Twice About CCK?
- Weak constant currency growth over the past two years indicates challenges in maintaining its market share
- Projected sales growth of 3.4% for the next 12 months suggests sluggish demand
- Gross margin of 20.5% is below its competitors, leaving less money to invest in areas like marketing and R&D
Crown Holdings’s stock price of $104.53 implies a valuation ratio of 12.9x forward P/E. If you’re considering CCK for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
CarGurus (CARG)
Trailing 12-Month GAAP Operating Margin: 19.3%
Bringing transparency to a sometimes opaque process, CarGurus (NASDAQ: CARG) is a digital marketplace where auto dealers can connect with potential customers and where car buyers can browse, purchase, and obtain financing.
Why Are We Positive On CARG?
- Monetization efforts are paying off as its average revenue per user has grown by 11.3% annually over the last two years
- Healthy EBITDA margin of 29.2% shows it’s a well-run company with efficient processes, and its rise over the last few years shows it refined its expense structure
- Free cash flow margin jumped by 20.9 percentage points over the last few years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
CarGurus is trading at $38.86 per share, or 11.3x forward EV/EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Raymond James (RJF)
Trailing 12-Month GAAP Operating Margin: 19.7%
Founded in 1962 and headquartered in St. Petersburg, Florida, Raymond James Financial (NYSE: RJF) is a diversified financial services company that provides wealth management, investment banking, asset management, and banking services to individuals and institutions.
Why Do We Love RJF?
- Solid 12% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 21.2% exceeded its revenue gains over the last five years
- Balance sheet strength has increased this cycle as its 14.4% annual tangible book value per share growth over the last two years was exceptional
At $167.72 per share, Raymond James trades at 14.1x 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
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