A company with profits isn’t always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential.

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here is one profitable company that balances growth and profitability and two that may struggle to keep up.

Two Stocks to Sell:

Winnebago (WGO)

Trailing 12-Month GAAP Operating Margin: 1.2%

Created to provide high-quality, affordable RVs to the post-war American family, Winnebago (NYSE: WGO) is a manufacturer of recreational vehicles, providing a range of motorhomes, travel trailers, and fifth-wheel products for outdoor and adventure lifestyles.

Why Do We Pass on WGO?

1. Customers postponed purchases of its products and services this cycle as its revenue declined by 21.4% annually over the last two years
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 15.2% annually while its revenue grew
3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Winnebago’s stock price of $36.63 implies a valuation ratio of 8.3x forward P/E. Check out our free in-depth research report to learn more about why WGO doesn’t pass our bar.

Pfizer (PFE)

Trailing 12-Month GAAP Operating Margin: 26.6%

With roots dating back to 1849 when two German immigrants opened a fine chemicals business in Brooklyn, Pfizer (NYSE: PFE) is a global biopharmaceutical company that discovers, develops, manufactures, and sells medicines and vaccines for a wide range of diseases and conditions.

Why Is PFE Not Exciting?

1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
2. Free cash flow margin shrank by 8.9 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
3. Eroding returns on capital suggest its historical profit centers are aging

At $22.68 per share, Pfizer trades at 7.6x forward P/E. If you’re considering PFE for your portfolio, see our FREE research report to learn more.

One Stock to Watch:

Tenet Healthcare (THC)

Trailing 12-Month GAAP Operating Margin: 17.6%

With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.

Why Do We Like THC?

1. Share buybacks catapulted its annual earnings per share growth to 30.7%, which outperformed its revenue gains over the last five years
2. Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
3. Improving returns on capital reflect management’s ability to monetize investments

Tenet Healthcare is trading at $159.14 per share, or 13.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free.