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 best left off your watchlist.
One Stock to Sell:
WEX (WEX)
Trailing 12-Month GAAP Operating Margin: 24.6%
Originally founded in 1983 as Wright Express to serve the fleet card market, WEX (NYSE: WEX) provides payment processing and business solutions across fleet management, employee benefits, and corporate payments sectors.
Why Does WEX Give Us Pause?
- Annual revenue growth of 2.1% over the last two years was below our standards for the financials sector
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 6% annually
WEX’s stock price of $131.23 implies a valuation ratio of 6.7x forward P/E. Dive into our free research report to see why there are better opportunities than WEX.
Two Stocks to Watch:
Coca-Cola (KO)
Trailing 12-Month GAAP Operating Margin: 29.3%
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Why Does KO Catch Our Eye?
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 61.4%
- Excellent operating margin of 27% highlights the efficiency of its business model, and its rise over the last year was fueled by some leverage on its fixed costs
- Free cash flow margin jumped by 27.5 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $80.26 per share, Coca-Cola trades at 24.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Paymentus (PAY)
Trailing 12-Month GAAP Operating Margin: 6.8%
Founded in 2004 to simplify the complex world of bill payments, Paymentus (NYSE: PAY) provides a cloud-based platform that helps utilities, municipalities, and service providers automate billing and payment processes.
Why Will PAY Outperform?
- Annual revenue growth of 40.2% over the last two years was superb and indicates its market share increased during this cycle
- Incremental sales over the last two years have been highly profitable as its earnings per share increased by 51% annually, topping its revenue gains
Paymentus is trading at $22.06 per share, or 24.9x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
