EN
2 profitable stocks with solid fundamentals and 1 we turn down
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. That said, here are two profitable companies that generate reliable profits without sacrificing growth and one that may face some trouble.
One stock to sell:
Donnelley Financial Solutions (DFIN)
Trailing 12-Month GAAP Operating Margin: 19.8%
Born from the need to navigate increasingly complex financial regulations in the digital age, Donnelley Financial Solutions (NYSE:DFIN) provides software and technology-enabled services that help companies comply with SEC regulations and manage financial transactions and reporting requirements.
Why Do We Think Twice About DFIN?
- Annual sales declines of 3.6% for the past five years show its products and services struggled to connect with the market during this cycle
- Earnings growth underperformed the sector average over the last five years as its EPS grew by just 6.3% annually
At $55.56 per share, Donnelley Financial Solutions trades at 10.5x forward P/E. Read our free research report to see why you should think twice about including DFIN in your portfolio.
Two stocks to watch:
Yum! Brands (YUM)
Trailing 12-Month GAAP Operating Margin: 31%
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 Does YUM Catch Our Eye?
- Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
- Highly efficient business model is illustrated by its impressive 31% operating margin
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Yum! Brands is trading at $149.71 per share, or 24.6x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Enpro (NPO)
Trailing 12-Month GAAP Operating Margin: 15.3%
Holding a Guinness World Record for creating the world's largest gasket, Enpro (NYSE:NPO) designs, manufactures, and sells products used for machinery in various industries.
Why Is NPO on Our Radar?
- Offerings are mission-critical for businesses and lead to a stellar gross margin of 41.1%
- Earnings per share grew by 15.9% annually over the last two years and trumped its peers
- Robust free cash flow margin of 12.8% gives it many options for capital deployment
Enpro’s stock price of $261.08 implies a valuation ratio of 25.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive 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.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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.