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 balance growth and profitability and one best left off your watchlist.
One Stock to Sell:
Reynolds (REYN)
Trailing 12-Month GAAP Operating Margin: 14.1%
Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Do We Steer Clear of REYN?
- Flat unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Gross margin of 25.2% is an output of its commoditized products
At $21.92 per share, Reynolds trades at 13.8x forward P/E. Dive into our free research report to see why there are better opportunities than REYN.
Two Stocks to Watch:
Casella Waste Systems (CWST)
Trailing 12-Month GAAP Operating Margin: 3.4%
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 Does CWST Catch Our Eye?
- Impressive 16.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Estimated revenue growth of 12.2% for the next 12 months implies its momentum over the last two years will continue
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 38.3% annually
Casella Waste Systems’s stock price of $83.74 implies a valuation ratio of 66.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Allstate (ALL)
Trailing 12-Month GAAP Operating Margin: 23.6%
Born from a Sears, Roebuck & Co. initiative during the Great Depression with its famous "You're in good hands" slogan, Allstate (NYSE:ALL) is one of America's largest personal property and casualty insurers, offering protection for autos, homes, and personal property.
Why Do We Like ALL?
- Pre-tax profit margin expanded by 18.4 percentage points over the last two years as it scaled and became more efficient
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 83.7% exceeded its revenue gains over the last two years
- Annual book value per share growth of 40.9% over the last two years was superb and indicates its capital strength increased during this cycle
Allstate is trading at $223.83 per share, or 1.7x forward P/B. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.