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".
A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here is one profitable company that generates reliable profits without sacrificing growth and two that may struggle to keep up.
Two Stocks to Sell:
MSA Safety (MSA)
Trailing 12-Month GAAP Operating Margin: 22.6%
Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE: MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.
Why Are We Cautious About MSA?
- Sales trends were unexciting over the last two years as its 3.6% annual growth was below the typical business services company
- Modest revenue base of $1.86 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 7.3% annually
MSA Safety’s stock price of $156.42 implies a valuation ratio of 18.6x forward P/E. Check out our free in-depth research report to learn more about why MSA doesn’t pass our bar.
UFP Industries (UFPI)
Trailing 12-Month GAAP Operating Margin: 6%
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Do We Steer Clear of UFPI?
- Declining unit sales over the past two years suggest it might have to lower prices to accelerate growth
- Performance over the past two years shows each sale was less profitable as its earnings per share dropped by 20.4% annually, worse than its revenue
- Eroding returns on capital suggest its historical profit centers are aging
UFP Industries is trading at $89.15 per share, or 15.8x forward P/E. Dive into our free research report to see why there are better opportunities than UFPI.
One Stock to Watch:
ITT (ITT)
Trailing 12-Month GAAP Operating Margin: 17.5%
Playing a crucial role in the development of the first transatlantic television transmission in 1956, ITT (NYSE: ITT) provides motion and fluid handling equipment for various industries
Why Does ITT Stand Out?
- Excellent operating margin of 17.5% highlights the efficiency of its business model
- Free cash flow margin jumped by 17.2 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Industry-leading 20.4% return on capital demonstrates management’s skill in finding high-return investments
At $182.66 per share, ITT trades at 24.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. 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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