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 balance growth and profitability and one that may face some trouble.
One Stock to Sell:
Matthews (MATW)
Trailing 12-Month GAAP Operating Margin: 1.3%
Originally a death care company, Matthews International (NASDAQ: MATW) is a diversified company offering ceremonial services, brand solutions and industrial technologies.
Why Is MATW Risky?
- Annual sales declines of 5% for the past five years show its products and services struggled to connect with the market
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Diminishing returns on capital from an already low starting point show that neither management’s prior nor current bets are going as planned
Matthews is trading at $27.12 per share, or 0.7x trailing 12-month price-to-sales. Dive into our free research report to see why there are better opportunities than MATW.
Two Stocks to Watch:
Enpro (NPO)
Trailing 12-Month GAAP Operating Margin: 15.3%
Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE: NPO) designs, manufactures, and sells products used for machinery in various industries.
Why Does NPO Catch Our Eye?
- Operating margin expanded by 5 percentage points over the last five years as it scaled and became more efficient
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 16.4% annually
- Robust free cash flow margin of 13% gives it many options for capital deployment
At $324.33 per share, Enpro trades at 33.5x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Brown & Brown (BRO)
Trailing 12-Month GAAP Operating Margin: 23.1%
With roots dating back to 1939 and operations spanning 44 U.S. states and 14 countries, Brown & Brown (NYSE: BRO) is an insurance brokerage and risk management firm that markets and sells insurance products across property, casualty, and employee benefits sectors.
Why Should You Buy BRO?
- Forecasted revenue growth of 11.1% for the next 12 months indicates its momentum over the last two years is sustainable
- Earnings per share grew by 18.5% annually over the last five years and trumped its peers
- BRO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Brown & Brown’s stock price of $68.88 implies a valuation ratio of 15.3x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
