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".

A business making money today isn’t necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. Keeping that in mind, here are two profitable companies that leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

USANA (USNA)

Trailing 12-Month GAAP Operating Margin: 5.5%

Going to market with a direct selling model rather than through traditional retailers, USANA Health Sciences (NYSE: USNA) manufactures and sells nutritional, personal care, and skincare products.

Why Does USNA Worry Us?

1. Products aren't resonating with the market as its revenue declined by 2.5% annually over the last three years
2. Subscale operations are evident in its revenue base of $925.3 million, meaning it has fewer distribution channels than its larger rivals
3. Sales were less profitable over the last three years as its earnings per share fell by 18.8% annually, worse than its revenue declines

USANA is trading at $17.21 per share, or 8.8x forward P/E. Read our free research report to see why you should think twice about including USNA in your portfolio.

Two Stocks to Buy:

Napco (NSSC)

Trailing 12-Month GAAP Operating Margin: 27.2%

Protecting everything from schools to government facilities since 1969, Napco Security Technologies (NASDAQ: NSSC) manufactures electronic security devices, access control systems, and communication services for intrusion and fire alarm systems.

Why Will NSSC Outperform?

1. Annual revenue growth of 14% over the past five years was outstanding, reflecting market share gains this cycle
2. Strong free cash flow margin of 19.3% enables it to reinvest or return capital consistently, and its rising cash conversion increases its margin of safety
3. Returns on capital are climbing as management makes more lucrative bets

At $42.38 per share, Napco trades at 28x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

DXP (DXPE)

Trailing 12-Month GAAP Operating Margin: 8.8%

Founded during the emergence of Big Oil in Texas, DXP (NASDAQ: DXPE) provides pumps, valves, and other industrial components.

Why Is DXPE a Good Business?

1. Market share has increased this cycle as its 14.9% annual revenue growth over the last five years was exceptional
2. Operating margin expanded by 5.2 percentage points over the last five years as it scaled and became more efficient
3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 47.4% exceeded its revenue gains over the last five years

DXP’s stock price of $131.16 implies a valuation ratio of 22.3x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.

Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.