Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
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:
Belden (BDC)
Trailing 12-Month GAAP Operating Margin: 11.2%
With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE: BDC) designs, manufactures, and sells electronic components to various industries.
Why Are We Wary of BDC?
- Sales stagnated over the last two years and signal the need for new growth strategies
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.8% annually
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $108.77 per share, Belden trades at 14.7x forward P/E. Check out our free in-depth research report to learn more about why BDC doesn’t pass our bar.
Two Stocks to Watch:
e.l.f. Beauty (ELF)
Trailing 12-Month GAAP Operating Margin: 9.8%
Short for "eyes, lips, face", e.l.f. Beauty (NYSE: ELF) is a developer of high-quality beauty products at accessible price points.
Why Does ELF Catch Our Eye?
- Remarkable 45.7% revenue growth over the last three years demonstrates its ability to capture significant market share
- Earnings growth has trumped its peers over the last three years as its EPS has compounded at 40.3% annually
- Free cash flow margin grew by 8.4 percentage points over the last year, giving the company more chips to play with
e.l.f. Beauty’s stock price of $72.70 implies a valuation ratio of 23.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
UnitedHealth (UNH)
Trailing 12-Month GAAP Operating Margin: 6.1%
With over 100 million people served across its various businesses and a workforce of more than 400,000, UnitedHealth Group (NYSE: UNH) operates a health insurance business and Optum, a healthcare services division that provides everything from pharmacy benefits to primary care.
Why Does UNH Stand Out?
- Products and services resonate with customers, evidenced by its respectable 11.5% annualized sales growth over the last five years
- Enormous revenue base of $435.2 billion gives it leverage over plan holders and advantageous reimbursement terms with healthcare providers
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
UnitedHealth is trading at $319.62 per share, or 19.2x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free for active Edge members .
High-Quality Stocks for All Market Conditions
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-small-cap company Exlservice (+354% 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
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