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. 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:
G-III (GIII)
Trailing 12-Month GAAP Operating Margin: 6.4%
Founded as a small leather goods business, G-III (NASDAQ:GIII) is a fashion and apparel conglomerate with a diverse portfolio of brands.
Why Do We Steer Clear of GIII?
- Annual revenue growth of 6% over the last five years was below our standards for the consumer discretionary sector
- Annual earnings per share growth of 3.5% underperformed its revenue over the last five years, showing its incremental sales were less profitable
- Poor free cash flow margin of 8.2% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
G-III’s stock price of $36.80 implies a valuation ratio of 14.8x forward P/E. If you’re considering GIII for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Aramark (ARMK)
Trailing 12-Month GAAP Operating Margin: 4.3%
From serving hot dogs at major league stadiums to managing college dining halls that feed thousands daily, Aramark (NYSE:ARMK) provides food services and facilities management to schools, healthcare facilities, businesses, sports venues, and correctional institutions across 16 countries.
Why Are We Fans of ARMK?
- Impressive 13.3% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Dominant market position is represented by its $19.41 billion in revenue and gives it fixed cost leverage when sales grow
- Incremental sales over the last five years have been highly profitable as its earnings per share increased by 26.5% annually, topping its revenue gains
Aramark is trading at $58.00 per share, or 23.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Expand Energy (EXE)
Trailing 12-Month GAAP Operating Margin: 27.9%
Rebranded from Chesapeake Energy in 2024 after emerging from bankruptcy, Expand Energy (NASDAQ:EXE) produces natural gas, oil, and natural gas liquids from underground shale formations in Louisiana, Pennsylvania, Ohio, and West Virginia.
Why Is EXE a Good Business?
- Annual revenue growth of 20.2% over the last five years was superb and indicates its market share increased during this cycle
- Enormous revenue base of $13.11 billion provides significant leverage in supplier negotiations
- EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
At $90.73 per share, Expand Energy trades at 11.7x forward P/E. Is now a good time to buy? See for yourself in our full 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.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
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 Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.