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".
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. 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:
Omnicom Group (OMC)
Trailing 12-Month GAAP Operating Margin: 13.7%
With a vast network of creative agencies that helped craft some of the most memorable ad campaigns in history, Omnicom Group (NYSE:OMC) is a strategic holding company that provides advertising, marketing, and communications services to many of the world's largest companies.
Why Are We Hesitant About OMC?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 4.8 percentage points
- Eroding returns on capital suggest its historical profit centers are aging
Omnicom Group is trading at $78.01 per share, or 9x forward P/E. Read our free research report to see why you should think twice about including OMC in your portfolio.
Two Stocks to Watch:
Amgen (AMGN)
Trailing 12-Month GAAP Operating Margin: 23.5%
Founded in 1980 during the early days of the biotechnology revolution, Amgen (NASDAQ:AMGN) is a biotechnology company that discovers, develops, and manufactures innovative medicines to treat serious illnesses like cancer, osteoporosis, and autoimmune diseases.
Why Do We Like AMGN?
- 14.6% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- $34.92 billion in revenue gives its scale, which leads to bargaining power with customers because there are few trusted alternatives
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
At $288 per share, Amgen trades at 13.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
LPL Financial (LPLA)
Trailing 12-Month GAAP Operating Margin: 12.9%
As the nation's largest independent broker-dealer with no proprietary products of its own, LPL Financial (NASDAQ:LPLA) provides technology, compliance, and business support services to independent financial advisors and institutions who manage investments for retail clients.
Why Are We Backing LPLA?
- Impressive 22.6% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Incremental sales over the last five years boosted profitability as its annual earnings per share growth of 21.3% outstripped its revenue performance
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
LPL Financial’s stock price of $361 implies a valuation ratio of 17.9x forward P/E. Is now the right 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 9 Market-Beating Stocks. 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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