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”.

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 leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

BJ's (BJ)

Trailing 12-Month GAAP Operating Margin: 3.7%

Appealing to the budget-conscious individual shopping for a household, BJ’s Wholesale Club (NYSE: BJ) is a membership-only retail chain that sells groceries, appliances, electronics, and household items, often in bulk quantities.

Why Does BJ Worry Us?

1. Annual sales growth of 4% over the last three years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
2. Gross margin of 18.5% is below its competitors, leaving less money for marketing and promotions
3. Poor expense management has led to an operating margin of 3.8% that is below the industry average

BJ’s stock price of $89.49 implies a valuation ratio of 19.1x forward P/E. If you’re considering BJ for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Badger Meter (BMI)

Trailing 12-Month GAAP Operating Margin: 18.9%

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE: BMI) provides water control and measure equipment to various industries.

Why Do We Love BMI?

1. Impressive 15.6% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 20.3% outpaced its revenue gains
3. Strong free cash flow margin of 15.8% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety

At $125.10 per share, Badger Meter trades at 26.8x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Noble Corporation (NE)

Trailing 12-Month GAAP Operating Margin: 14.2%

With origins dating back over a century to 1921, Noble Corporation (NYSE: NE) operates drilling rigs that oil and gas companies charter to drill wells in deep ocean waters and shallow seas.

Why Do We Watch NE?

1. Annual revenue growth of 30.2% over the past five years was outstanding, reflecting market share gains this cycle
2. Revenue base of $3.20 billion gives it economies of scale and some negotiating power with suppliers
3. EBITDA margin improvement of 25.6 percentage points over the last five years demonstrates its ability to scale efficiently

Noble Corporation is trading at $46.50 per share, or 39.1x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.