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 face some trouble.
One Stock to Sell:
KBR (KBR)
Trailing 12-Month GAAP Operating Margin: 9.8%
Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.
Why Are We Wary of KBR?
- Product roadmap and go-to-market strategy need to be reconsidered as its backlog has averaged 1.2% declines over the past two years
- Projected sales growth of 6.1% for the next 12 months suggests sluggish demand
- Responsiveness to unforeseen market trends is restricted due to its substandard operating margin profitability
KBR’s stock price of $32.14 implies a valuation ratio of 8x forward P/E. If you’re considering KBR for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Palo Alto Networks (PANW)
Trailing 12-Month GAAP Operating Margin: 14.4%
Founded in 2005 by security visionary Nir Zuk who sought to reimagine firewall technology, Palo Alto Networks (NASDAQ: PANW) provides AI-powered cybersecurity platforms that protect organizations' networks, clouds, and endpoints from sophisticated threats.
Why Does PANW Catch Our Eye?
- Exciting sales outlook for the upcoming 12 months calls for 28.1% growth, an acceleration from its two-year trend
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Strong free cash flow margin of 36% enables it to reinvest or return capital consistently
Palo Alto Networks is trading at $214.69 per share, or 12x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
HCA Healthcare (HCA)
Trailing 12-Month GAAP Operating Margin: 15.9%
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
Why Is HCA a Top Pick?
- Unparalleled scale of $76.39 billion in revenue gives it negotiating leverage and staying power in an industry with high barriers to entry
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 28.8% return on capital demonstrates management’s skill in finding high-return investments
At $432 per share, HCA Healthcare trades at 13.8x 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 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
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.
