Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
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 struggle to keep up.
One Stock to Sell:
Atmus Filtration Technologies (ATMU)
Trailing 12-Month GAAP Operating Margin: 17%
Spun out of Cummins in 2023 after 65 years as part of the engine maker, Atmus Filtration Technologies (NYSE:ATMU) manufactures filters for trucks, construction equipment, and agriculture machinery to reduce emissions and protect engines.
Why Does ATMU Worry Us?
- Muted 5.6% annual revenue growth over the last two years shows its demand lagged behind its industrials peers
- Gross margin of 26.3% reflects its high production costs
Atmus Filtration Technologies’s stock price of $54.25 implies a valuation ratio of 2.2x forward price-to-sales. Dive into our free research report to see why there are better opportunities than ATMU.
Two Stocks to Watch:
Casella Waste Systems (CWST)
Trailing 12-Month GAAP Operating Margin: 3.5%
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ:CWST) offers waste management services for businesses, residents, and the government.
Why Is CWST on Our Radar?
- Market share has increased this cycle as its 18.2% annual revenue growth over the last two years was exceptional
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
- Earnings per share grew by 24.2% annually over the last two years and trumped its peers
Casella Waste Systems is trading at $85.57 per share, or 74.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
American Express (AXP)
Trailing 12-Month GAAP Operating Margin: 20.7%
Recognizable by its iconic green logo and the slogan "Don't leave home without it," American Express (NYSE:AXP) is a global payments company that issues credit and charge cards, processes merchant transactions, and offers travel and lifestyle benefits to consumers and businesses.
Why Is AXP a Good Business?
- Market share has increased this cycle as its 15.5% annual revenue growth over the last five years was exceptional
- Performance over the past five years was boosted by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
At $321.95 per share, American Express trades at 17.5x forward P/E. Is now a good time to buy? Find out 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.