Profitable companies tend to be more resilient, giving them the flexibility to invest and return capital to shareholders. Businesses that consistently generate earnings can better navigate downturns and capitalize on new opportunities.
Even among profitable businesses, only a select few truly maximize their potential - and StockStory is here to help you find them. Keeping that in mind, here are three profitable companies that leverage their financial strength to beat the competition.
MACOM (MTSI)
Trailing 12-Month GAAP Operating Margin: 16%
Founded in the 1950s as Microwave Associates, a communications supplier to the US Army Signal Corp, today MACOM Technology Solutions (NASDAQ: MTSI) is a provider of analog chips used in optical, wireless, and satellite networks.
Why Are We Positive On MTSI?
- Market share has increased this cycle as its 29.8% annual revenue growth over the last two years was exceptional
- Sales outlook for the upcoming 12 months calls for 37.1% growth, an acceleration from its two-year trend
- Offerings are difficult to replicate at scale and lead to a premier gross margin of 55.1%
MACOM is trading at $371.32 per share, or 61.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Dick's (DKS)
Trailing 12-Month GAAP Operating Margin: 8.7%
Started as a hunting supply store, Dick’s Sporting Goods (NYSE: DKS) is a retailer that sells merchandise for traditional sports as well as for fitness and outdoor activities.
Why Does DKS Stand Out?
- Offensive push to build new stores and attack its untapped market opportunities is backed by its same-store sales growth
- Same-store sales growth averaged 3.8% over the past two years, showing it’s bringing new and repeat shoppers into its stores
- Exciting sales outlook for the upcoming 12 months calls for 29.6% growth, an acceleration from its three-year trend
Dick’s stock price of $216.32 implies a valuation ratio of 15.4x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Bel Fuse (BELFA)
Trailing 12-Month GAAP Operating Margin: 15.6%
Founded by 26-year-old Elliot Bernstein during the electronics boom after WW2, Bel Fuse (NASDAQ: BELF.A) provides electronic systems and devices to the telecommunications, networking, transportation, and industrial sectors.
Why Will BELFA Outperform?
- Operating margin expanded by 9.4 percentage points over the last five years as it scaled and became more efficient
- Incremental sales significantly boosted profitability as its annual earnings per share growth of 20.5% over the last two years outstripped its revenue performance
- Free cash flow margin expanded by 13.3 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
At $230.72 per share, Bel Fuse trades at 18.4x forward EV-to-EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
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