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. Keeping that in mind, here are two profitable companies that balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
J&J Snack Foods (JJSF)
Trailing 12-Month GAAP Operating Margin: 5.3%
Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ: JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
Why Does JJSF Fall Short?
- Annual revenue growth of 4.7% over the last three years was below our standards for the consumer staples sector
- Revenue base of $1.58 billion puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Estimated sales growth of 1.9% for the next 12 months implies demand will slow from its three-year trend
At $93.42 per share, J&J Snack Foods trades at 20.7x forward P/E. If you’re considering JJSF for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
McDonald's (MCD)
Trailing 12-Month GAAP Operating Margin: 46.1%
With nicknames spanning Mickey D's in the U.S. to Makku in Japan, McDonald’s (NYSE: MCD) is a fast-food behemoth known for its convenience and broken ice cream machines.
Why Do We Like MCD?
- Fast expansion of new restaurants indicates an aggressive approach to attacking untapped market opportunities
- Asset-lite franchise model is reflected in its superior unit economics and a best-in-class gross margin of 57%
- MCD is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
McDonald’s stock price of $312.85 implies a valuation ratio of 23.8x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
RB Global (RBA)
Trailing 12-Month GAAP Operating Margin: 16.4%
Born from the 1958 founding of Ritchie Bros. Auctioneers and rebranded in 2023, RB Global (NYSE: RBA) operates global marketplaces that connect buyers and sellers of commercial assets, vehicles, and equipment across multiple industries.
Why Should You Buy RBA?
- Impressive 21.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Earnings per share grew by 18.7% annually over the last five years and trumped its peers
- Strong free cash flow margin of 15.1% enables it to reinvest or return capital consistently
RB Global is trading at $116.99 per share, or 27.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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 9 Market-Beating Stocks. 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).
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