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.
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 best left off your watchlist.
One Stock to Sell:
Reynolds (REYN)
Trailing 12-Month GAAP Operating Margin: 13.6%
Best known for its aluminum foil, Reynolds (NASDAQ: REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Do We Steer Clear of REYN?
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Estimated sales for the next 12 months are flat and imply a softer demand environment
- Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 25.4%
At $23.87 per share, Reynolds trades at 14.9x forward P/E. If you’re considering REYN for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Monster (MNST)
Trailing 12-Month GAAP Operating Margin: 30.1%
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ: MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Why Are We Bullish on MNST?
- Healthy operating margin of 28.4% shows it’s a well-run company with efficient processes, and its rise over the last year was fueled by some leverage on its fixed costs
- Strong free cash flow margin of 23.8% enables it to reinvest or return capital consistently
- ROIC punches in at 36.2%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
Monster is trading at $91.95 per share, or 38.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
FirstCash (FCFS)
Trailing 12-Month GAAP Operating Margin: 15.8%
Offering a financial lifeline to the unbanked and credit-constrained since 1988, FirstCash (NASDAQ: FCFS) operates pawn stores across the U.S. and Latin America while also providing retail point-of-sale payment solutions for credit-constrained consumers.
Why Is FCFS Interesting?
- Annual revenue growth of 19.8% over the last five years was superb and indicates its market share increased during this cycle
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 26.5% over the last five years outstripped its revenue performance
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
FirstCash’s stock price of $226 implies a valuation ratio of 20.4x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
