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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. Keeping that in mind, here are two profitable companies that generate reliable profits without sacrificing growth and one best left off your watchlist.
One Stock to Sell:
Helix Energy Solutions (HLX)
Trailing 12-Month GAAP Operating Margin: 3.4%
Playing a pivotal role in the 2010 Macondo oil spill response with its Q4000 vessel, Helix Energy Solutions (NYSE: HLX) provides specialized services to extend the life of offshore oil and gas wells and decommission aging infrastructure.
Why Are We Hesitant About HLX?
- Smaller revenue base of $1.30 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Gross margin of 11.4% reflects its high production costs and unfavorable asset base
Helix Energy Solutions’s stock price of $10.23 implies a valuation ratio of 1.2x forward price-to-sales. To fully understand why you should be careful with HLX, check out our full research report (it’s free).
Two Stocks to Watch:
Zoetis (ZTS)
Trailing 12-Month GAAP Operating Margin: 37.2%
Originally spun off from Pfizer in 2013 as the world's largest pure-play animal health company, Zoetis (NYSE: ZTS) discovers, develops, and sells medicines, vaccines, diagnostic products, and services for pets and livestock animals worldwide.
Why Are We Fans of ZTS?
- Average constant currency growth of 8.7% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
- Strong free cash flow margin of 21% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $79.77 per share, Zoetis trades at 11.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Crescent Energy (CRGY)
Trailing 12-Month GAAP Operating Margin: 10.1%
Controlling over 1.4 million net acres across proven U.S. basins, Crescent Energy (NYSE: CRGY) extracts oil and natural gas from underground reservoirs in Texas and the Rocky Mountains.
Why Is CRGY a Good Business?
- Market share has increased this cycle as its 41.5% annual revenue growth over the last five years was exceptional
- Excellent production efficiency leads to a top-tier gross margin of 59%
- Robust free cash flow margin of 14.8% gives it many options for capital deployment
Crescent Energy is trading at $13.74 per share, or 5.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
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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.
