A company with profits isn’t always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.
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 balance growth and profitability and one that may struggle to keep up.
One Stock to Sell:
John Bean (JBTM)
Trailing 12-Month GAAP Operating Margin: 2.6%
Tracing back to its invention of the mechanical milk bottle filler in 1884, John Bean (NYSE:JBT) designs, manufactures, and sells equipment used for food processing and aviation.
Why Do We Pass on JBTM?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Free cash flow margin shrank by 6.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
- 5× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
John Bean’s stock price of $118.49 implies a valuation ratio of 19.1x forward P/E. If you’re considering JBTM for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Coca-Cola (KO)
Trailing 12-Month GAAP Operating Margin: 24.5%
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE:KO) is a storied beverage company best known for its flagship soda.
Why Is KO Interesting?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 11.1% over the past two years
- Customer loyalty and massive revenue base of $46.98 billion makes it a household name that influences purchasing decisions
- Products command premium prices and lead to a best-in-class gross margin of 60.6%
Coca-Cola is trading at $71.35 per share, or 23.7x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Medpace (MEDP)
Trailing 12-Month GAAP Operating Margin: 21.2%
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ:MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Do We Like MEDP?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 17.8% over the past two years
- Share repurchases over the last five years enabled its annual earnings per share growth of 35.1% to outpace its revenue gains
- Returns on capital are growing as management capitalizes on its market opportunities
At $312.74 per share, Medpace trades at 25x 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
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our 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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.