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.
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 generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Ally Financial (ALLY)
Trailing 12-Month GAAP Operating Margin: 14.3%
Born from the former GMAC (General Motors Acceptance Corporation) and rebranded in 2010, Ally Financial (NYSE:ALLY) operates a digital-first bank offering auto financing, insurance, mortgage lending, and investment services to consumers and commercial clients.
Why Should You Sell ALLY?
- Flat sales over the last two years suggest it must find different ways to grow during this cycle
- Earnings per share fell by 2.6% annually over the last two years while its revenue was flat, showing each sale was less profitable
- Insufficient tier one capital ratio of 9.7% leaves little margin for error in meeting regulatory liquidity requirements
At $42.65 per share, Ally Financial trades at 8.7x forward P/E. Check out our free in-depth research report to learn more about why ALLY doesn’t pass our bar.
Two Stocks to Watch:
Monster (MNST)
Trailing 12-Month GAAP Operating Margin: 28.6%
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ:MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Why Do We Love MNST?
- Highly efficient business model is illustrated by its impressive 28% operating margin, and its rise over the last year was fueled by some leverage on its fixed costs
- MNST is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Monster’s stock price of $73.60 implies a valuation ratio of 34x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Goldman Sachs (GS)
Trailing 12-Month GAAP Operating Margin: 36.5%
Founded in 1869 as a small commercial paper business in New York City, Goldman Sachs (NYSE:GS) is a global financial institution that provides investment banking, securities, asset management, and consumer banking services to corporations, governments, and individuals.
Why Are We Fans of GS?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 13.5% annual sales growth over the last two years
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 53.7% exceeded its revenue gains over the last two years
- Adequate return on equity shows management makes decent investment decisions
Goldman Sachs is trading at $876.42 per share, or 16.1x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth 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 Growth Stocks for this month. 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-micro-cap company Tecnoglass (+1,754% 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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