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. That said, here are two profitable companies that leverage their financial strength to beat the competition and one that may face some trouble.
One stock to sell:
Halliburton (HAL)
Trailing 12-month GAAP operating margin: 12.6%
Behind nearly every oil and gas well drilled worldwide, Halliburton (NYSE: HAL) provides drilling, completion, and production services that help oil and gas companies extract hydrocarbons from underground reservoirs.
Why Does HAL Fall Short?
- The company has faced growth challenges as its 9.5% annual revenue increases over the last five years fell short of other energy upstream and integrated energy companies
- Gross margin of 16.8% is below its competitors, leaving less money to invest in exploration and production
- EBITDA margin didn’t move over the last five years, showing it couldn’t increase its efficiency
Halliburton’s stock price of $33.17 implies a valuation ratio of 12.5x forward P/E. If you’re considering HAL for your portfolio, see our FREE research report to learn more.
Two stocks to buy:
MYR Group (MYRG)
Trailing 12-month GAAP operating margin: 6.1%
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ: MYRG) is a specialty contractor in the electrical construction industry.
Why Should You Buy MYRG?
- Sales pipeline is in good shape as its backlog averaged 11.6% growth over the past two years
- Exciting sales outlook for the upcoming 12 months calls for 18.2% growth, an acceleration from its two-year trend
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
MYR Group is trading at $264.02 per share, or 19.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
DexCom (DXCM)
Trailing 12-month GAAP operating margin: 24%
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Do We Love DXCM?
- Average organic revenue growth of 13% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Free cash flow margin grew by 12.2 percentage points over the last five years, giving the company more chips to play with
- Rising returns on capital show management is finding more attractive investment opportunities
At $88.23 per share, DexCom trades at 28.1x forward P/E. Is now the right 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
