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.
Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, here are two profitable companies that balance growth and profitability and one that may face some trouble.
One Stock to Sell:
Equifax (EFX)
Trailing 12-Month GAAP Operating Margin: 18%
Holding detailed financial records on over 800 million consumers worldwide and dating back to 1899, Equifax (NYSE: EFX) is a global data analytics company that collects, analyzes, and sells consumer and business credit information to lenders, employers, and other businesses.
Why Are We Cautious About EFX?
- Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 4.1 percentage points
- Earnings per share lagged its peers over the last five years as they only grew by 2.2% annually
Equifax is trading at $182.03 per share, or 22.2x forward P/E. If you’re considering EFX for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Rollins (ROL)
Trailing 12-Month GAAP Operating Margin: 19.3%
Operating under multiple brands like Orkin and HomeTeam Pest Defense, Rollins (NYSE: ROL) provides pest and wildlife control services to residential and commercial customers.
Why Should You Buy ROL?
- Impressive 11.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Superior product capabilities and pricing power result in a best-in-class gross margin of 52.3%
- Strong free cash flow margin of 16.5% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy
At $55.83 per share, Rollins trades at 44.9x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Installed Building Products (IBP)
Trailing 12-Month GAAP Operating Margin: 13%
Founded in 1977, Installed Building Products (NYSE: IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Why Are We Fans of IBP?
- Market share has increased this cycle as its 12.4% annual revenue growth over the last five years was exceptional
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 21.4% exceeded its revenue gains over the last five years
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
Installed Building Products’s stock price of $271.63 implies a valuation ratio of 24.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
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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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
