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. Keeping that in mind, here is one profitable company that generates reliable profits without sacrificing growth and two best left off your watchlist.
Two Stocks to Sell:
Assurant (AIZ)
Trailing 12-Month GAAP Operating Margin: 9.8%
With roots dating back to 1892 when it was founded by a Civil War veteran, Assurant (NYSE:AIZ) provides specialized insurance products and services that protect major consumer purchases like mobile devices, vehicles, homes, and appliances.
Why Are We Hesitant About AIZ?
- Large revenue base constrains its growth potential, as seen in its unexciting 5.2% annualized increases in net premiums earned over the last five years fell below our expectations for the insurance sector
- Earnings per share lagged its peers over the last two years as they only grew by 15.6% annually
- Large asset base makes it harder to grow book value per share quickly, and its annual book value per share growth of 4.4% over the last five years was below our standards for the insurance sector
At $266.51 per share, Assurant trades at 2.1x forward P/B. Check out our free in-depth research report to learn more about why AIZ doesn’t pass our bar.
TechnipFMC (FTI)
Trailing 12-Month GAAP Operating Margin: 14.6%
Operating a fleet of 16 specialized vessels that install equipment on the seafloor, TechnipFMC (NYSE:FTI) designs and manufactures subsea systems that control the flow of oil and natural gas from the ocean floor to processing facilities.
Why Does FTI Fall Short?
- Sales stagnated over the last five years and signal the need for new growth strategies
- Gross margin of 18.7% reflects its high production costs and unfavorable asset base
TechnipFMC is trading at $70.50 per share, or 20.3x forward P/E. Dive into our free research report to see why there are better opportunities than FTI.
One Stock to Buy:
Guidewire Software (GWRE)
Trailing 12-Month GAAP Operating Margin: 10.2%
With its systems powering the operations of hundreds of insurance brands across 42 countries, Guidewire Software (NYSE:GWRE) provides a technology platform that helps property and casualty insurance companies manage their core operations, digital engagement, and analytics.
Why Is GWRE a Top Pick?
- Billings have averaged 23.9% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
- Highly efficient business model is illustrated by its impressive 10.2% operating margin, and its operating leverage amplified its profits over the last year
Guidewire Software’s stock price of $166.80 implies a valuation ratio of 8x forward price-to-sales. Is now the right time to buy? Find out in our full 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.