While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".
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 leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
McCormick (MKC)
Trailing 12-Month GAAP Operating Margin: 15.8%
The classic red Heinz ketchup bottle’s competitor, McCormick (NYSE:MKC) sells food-flavoring products like condiments, spices, and seasoning mixes.
Why Is MKC Not Exciting?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Earnings growth underperformed the sector average over the last three years as its EPS grew by just 2% annually
- Free cash flow margin shrank by 4.8 percentage points over the last year, suggesting the company is consuming more capital to stay competitive
McCormick’s stock price of $69.60 implies a valuation ratio of 22.3x forward P/E. To fully understand why you should be careful with MKC, check out our full research report (it’s free).
Two Stocks to Watch:
Mirion (MIR)
Trailing 12-Month GAAP Operating Margin: 5.5%
With its technology protecting workers in over 130 countries and equipment used in 80% of cancer centers worldwide, Mirion Technologies (NYSE:MIR) provides radiation detection, measurement, and monitoring solutions for medical, nuclear energy, defense, and scientific research applications.
Why Do We Like MIR?
- 8.2% annual revenue growth over the last four years surpassed the sector average as its services resonated with customers
- Additional sales over the last two years increased its profitability as the 28.2% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 3.7 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Mirion is trading at $20.50 per share, or 39.9x forward EV-to-EBITDA. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Mastercard (MA)
Trailing 12-Month GAAP Operating Margin: 55.8%
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE:MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Why Is MA a Top Pick?
- Annual revenue growth of 13.3% over the last five years beat the sector average and underscores the unique value of its offerings
- Performance over the past two years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $594.50 per share, Mastercard trades at 34.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 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-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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