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.

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, 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:

Hormel Foods (HRL)

Trailing 12-Month GAAP Operating Margin: 8.5%

Best known for its SPAM brand, Hormel (NYSE: HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.

Why Are We Cautious About HRL?

1. Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
2. Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 16.7%
3. Earnings per share decreased by more than its revenue over the last three years, showing each sale was less profitable

At $29.10 per share, Hormel Foods trades at 16.9x forward P/E. Dive into our free research report to see why there are better opportunities than HRL.

Two Stocks to Watch:

United Therapeutics (UTHR)

Trailing 12-Month GAAP Operating Margin: 47%

Founded by a mother seeking treatment for her daughter's pulmonary arterial hypertension, United Therapeutics (NASDAQ: UTHR) develops and commercializes medications for chronic lung diseases and other life-threatening conditions, with a focus on pulmonary hypertension treatments.

Why Will UTHR Outperform?

1. Annual revenue growth of 20.7% over the past two years was outstanding, reflecting market share gains this cycle
2. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business
3. Returns on capital are climbing as management makes more lucrative bets

United Therapeutics’s stock price of $310 implies a valuation ratio of 9.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Lantheus (LNTH)

Trailing 12-Month GAAP Operating Margin: 28.8%

Pioneering the "Find, Fight and Follow" approach to disease management, Lantheus Holdings (NASDAQGM:LNTH) develops and commercializes radiopharmaceuticals and other imaging agents that help healthcare professionals detect, diagnose, and treat diseases.

Why Does LNTH Stand Out?

1. Market share has increased this cycle as its 35.6% annual revenue growth over the last five years was exceptional
2. Free cash flow margin expanded by 22.9 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
3. Returns on capital are growing as management capitalizes on its market opportunities

Lantheus is trading at $59.37 per share, or 8.7x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

High-Quality Stocks for All Market Conditions

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 5 Growth Stocks for this month. 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-micro-cap company Kadant (+351% 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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