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. Keeping that in mind, here are two profitable companies that balance growth and profitability and one that may face some trouble.

One Stock to Sell:

Norfolk Southern (NSC)

Trailing 12-Month GAAP Operating Margin: 35.8%

Starting with a single route from Virginia to North Carolina, Norfolk Southern (NYSE: NSC) is a freight transportation company operating a major railroad network across the eastern United States.

Why Do We Pass on NSC?

1. Flat sales over the last two years suggest it must find different ways to grow during this cycle
2. Efficiency has decreased over the last five years as its operating margin fell by 4.1 percentage points
3. 8.4 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position

Norfolk Southern’s stock price of $287.11 implies a valuation ratio of 23.4x forward P/E. Dive into our free research report to see why there are better opportunities than NSC.

Two Stocks to Buy:

AMD (AMD)

Trailing 12-Month GAAP Operating Margin: 10.7%

Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.

Why Will AMD Beat the Market?

1. Annual revenue growth of 28.8% over the last five years was superb and indicates its market share increased during this cycle
2. Market share is on track to rise over the next 12 months as its 34.8% projected revenue growth implies demand will accelerate from its two-year trend
3. Earnings per share grew by 26.4% annually over the last five years and easily exceeded the peer group average

AMD is trading at $204.91 per share, or 29.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

SPX Technologies (SPXC)

Trailing 12-Month GAAP Operating Margin: 15.5%

With roots dating back to 1912 as the Piston Ring Company, SPX Technologies (NYSE: SPXC) supplies specialized infrastructure equipment for HVAC systems and detection and measurement applications across industrial, commercial, and utility markets.

Why Is SPXC a Top Pick?

1. Annual revenue growth of 14.1% over the last two years was superb and indicates its market share increased during this cycle
2. Operating margin improvement of 9.4 percentage points over the last five years demonstrates its ability to scale efficiently
3. Earnings per share have massively outperformed its peers over the last two years, increasing by 25.3% annually

At $198.46 per share, SPX Technologies trades at 24.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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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.