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. That said, here are two profitable companies that generate reliable profits without sacrificing growth and one that may struggle to keep up.
One Stock to Sell:
Perella Weinberg (PWP)
Trailing 12-Month GAAP Operating Margin: 8.9%
Founded in 2006 by veteran investment bankers Joseph Perella and Peter Weinberg during a wave of boutique advisory firm launches, Perella Weinberg Partners (NASDAQ:PWP) is a global independent advisory firm that provides strategic and financial advice to corporations, financial sponsors, and government institutions.
Why Do We Think Twice About PWP?
- Flat earnings per share over the last three years lagged its peers
- Negative return on equity shows management lost money while trying to expand the business
Perella Weinberg is trading at $19.22 per share, or 17.9x forward P/E. Read our free research report to see why you should think twice about including PWP in your portfolio.
Two Stocks to Watch:
Vita Coco (COCO)
Trailing 12-Month GAAP Operating Margin: 12.4%
Founded in 2004 followed by a 2021 IPO, The Vita Coco Company (NASDAQ:COCO) offers coconut water products that are a natural way to quench thirst.
Why Is COCO on Our Radar?
- Products are reaching more households as its unit sales averaged 7.8% growth over the past two years
- Earnings growth has trumped its peers over the last three years as its EPS has compounded at 195% annually
- ROIC punches in at 47.7%, illustrating management’s expertise in identifying profitable investments, and its returns are growing as it capitalizes on even better market opportunities
At $40.50 per share, Vita Coco trades at 32.6x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Mastercard (MA)
Trailing 12-Month GAAP Operating Margin: 55.8%
Recognizable by its iconic "Priceless" advertising campaign that has run in over 120 countries, Mastercard (NYSE:MA) operates a global payments network that connects consumers, financial institutions, merchants, and businesses, enabling electronic transactions and providing payment solutions.
Why Do We Love MA?
- Solid 13.3% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Share buybacks propelled its annual earnings per share growth to 18.9%, which outperformed its revenue gains over the last two years
- ROE punches in at 159%, illustrating management’s expertise in identifying profitable investments
Mastercard’s stock price of $561.10 implies a valuation ratio of 31.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free for active Edge members.
High-Quality Stocks for All Market Conditions
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