While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. 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:

IDEX (IEX)

Trailing 12-Month GAAP Operating Margin: 20.7%

Founded in 1988, IDEX (NYSE: IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.

Why Is IEX Not Exciting?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 1.2% annually
3. Eroding returns on capital suggest its historical profit centers are aging

IDEX is trading at $218.30 per share, or 25.3x forward P/E. Dive into our free research report to see why there are better opportunities than IEX.

Two Stocks to Watch:

KLA Corporation (KLAC)

Trailing 12-Month GAAP Operating Margin: 41.7%

Formed by the 1997 merger of the two leading semiconductor yield management companies, KLA Corporation (NASDAQ: KLAC) is the leading supplier of equipment used to measure and inspect semiconductor chips.

Why Is KLAC a Top Pick?

1. Impressive 15.2% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 61%
3. Strong free cash flow margin of 30.5% enables it to reinvest or return capital consistently

KLA Corporation’s stock price of $1,745 implies a valuation ratio of 38.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

Yum! Brands (YUM)

Trailing 12-Month GAAP Operating Margin: 31.5%

Spun off as an independent company from PepsiCo, Yum! Brands (NYSE: YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.

Why Are We Fans of YUM?

1. Bold push to open new restaurants demonstrates an ambitious strategy to establish itself in underpenetrated territories
2. Excellent operating margin of 31.4% highlights the efficiency of its business model
3. Robust free cash flow margin of 19.1% gives it many options for capital deployment

At $159.84 per share, Yum! Brands trades at 23.4x 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

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.

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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.