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 balance growth and profitability and one that may struggle to keep up.
One Stock to Sell:
Accel Entertainment (ACEL)
Trailing 12-Month GAAP Operating Margin: 8%
Established in Illinois, Accel Entertainment (NYSE:ACEL) is a provider of electronic gaming machines and interactive amusement terminals to bars and entertainment venues.
Why Do We Think ACEL Will Underperform?
- Number of video gaming terminals sold has disappointed over the past two years, indicating weak demand for its offerings
- Poor free cash flow margin of 4.9% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Accel Entertainment’s stock price of $12.46 implies a valuation ratio of 13.5x forward P/E. If you’re considering ACEL for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Interface (TILE)
Trailing 12-Month GAAP Operating Margin: 12.2%
Pioneering carbon-neutral flooring since its founding in 1973, Interface (NASDAQ:TILE) is a global manufacturer of modular carpet tiles, luxury vinyl tile (LVT), and rubber flooring that specializes in carbon-neutral and sustainable flooring solutions.
Why Does TILE Stand Out?
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 33.7% outpaced its revenue gains
- Free cash flow margin increased by 7.2 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Rising returns on capital show management is finding more attractive investment opportunities
At $32.95 per share, Interface trades at 1.3x trailing 12-month price-to-sales. Is now the right time to buy? Find out in our full research report, it’s free.
McKesson (MCK)
Trailing 12-Month GAAP Operating Margin: 1.5%
With roots dating back to 1833, making it one of America's oldest continuously operating businesses, McKesson (NYSE:MCK) is a healthcare services company that distributes pharmaceuticals, medical supplies, and provides technology solutions to pharmacies, hospitals, and healthcare providers.
Why Are We Bullish on MCK?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 14.3% annual sales growth over the last two years
- Massive revenue base of $403.4 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
McKesson is trading at $801.00 per share, or 18.3x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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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.