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3 Profitable Stocks with Competitive Advantages
Profitability is a key measure of business strength. Companies with high margins have proven they can generate consistent earnings while maintaining financial discipline.
Identifying the most compelling profitable companies isn’t always straightforward, and that’s why we started StockStory. Keeping that in mind, here are three profitable companies that balance growth and profitability.
PTC (PTC)
Trailing 12-Month GAAP Operating Margin: 38.7%
Originally known as Parametric Technology Corporation until its 2013 rebranding, PTC (NASDAQ:PTC) provides software that helps manufacturers design, develop, and service physical products through digital solutions for CAD, PLM, ALM, and SLM.
Why Are We Bullish on PTC?
- Billings have averaged 21% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Software is difficult to replicate at scale and leads to a stellar gross margin of 84.7%
- Highly efficient business model is illustrated by its impressive 38.7% operating margin, and it turbocharged its profits by achieving some fixed cost leverage
PTC is trading at $121.44 per share, or 5.5x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
O'Reilly (ORLY)
Trailing 12-Month GAAP Operating Margin: 19.6%
Serving both the DIY customer and professional mechanic, O’Reilly Automotive (NASDAQ:ORLY) is an auto parts and accessories retailer that sells everything from fuel pumps to car air fresheners to mufflers.
Why Do We Love ORLY?
- Brick-and-mortar locations are witnessing elevated demand as their same-store sales growth averaged 4.4% over the past two years
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 19.4%
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $87.86 per share, O'Reilly trades at 25.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Plexus (PLXS)
Trailing 12-Month GAAP Operating Margin: 5.2%
With over 20,000 team members across 26 global facilities, Plexus (NASDAQ:PLXS) designs, manufactures, and services complex electronic products for companies in aerospace/defense, healthcare, and industrial sectors.
Why Do We Watch PLXS?
- Exciting sales outlook for the upcoming 12 months calls for 17.7% 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
- ROIC punches in at 15.4%, illustrating management’s expertise in identifying profitable investments
Plexus’s stock price of $263.27 implies a valuation ratio of 28.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.