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.
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
BWX (BWXT)
Trailing 12-Month GAAP Operating Margin: 13.5%
Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE:BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.
Why Does BWXT Fall Short?
- 6.9% annual revenue growth over the last five years was slower than its industrials peers
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 2.3 percentage points
- Earnings per share lagged its peers over the last five years as they only grew by 4.2% annually
At $204.25 per share, BWX trades at 55.3x forward P/E. If you’re considering BWXT for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Dutch Bros (BROS)
Trailing 12-Month GAAP Operating Margin: 9.2%
Started in 1992 by two brothers as a single pushcart, Dutch Bros (NYSE:BROS) is a dynamic coffee chain that’s captured the hearts of coffee enthusiasts across the United States.
Why Do We Watch BROS?
- Offensive push to build new restaurants and attack its untapped market opportunities is backed by its same-store sales growth
- Same-store sales growth averaged 5.4% over the past two years, showing it’s bringing new and repeat diners into its restaurants
- Free cash flow margin grew by 9.8 percentage points over the last year, giving the company more chips to play with
Dutch Bros is trading at $60.29 per share, or 77.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free for active Edge members.
Mueller Water Products (MWA)
Trailing 12-Month GAAP Operating Margin: 15.7%
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE:MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Why Are We Fans of MWA?
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 12.5%, and it turbocharged its profits by achieving some fixed cost leverage
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 44.6% annually
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
Mueller Water Products’s stock price of $25.83 implies a valuation ratio of 18.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.