Profitability is a key measure of business strength. Companies with high margins have proven they can generate consistent earnings while maintaining financial discipline.
Even among profitable businesses, only a select few truly maximize their potential - and StockStory is here to help you find them. Keeping that in mind, here are three profitable companies that leverage their financial strength to beat the competition.
MercadoLibre (MELI)
Trailing 12-Month GAAP Operating Margin: 11.1%
Originally started as an online auction platform, MercadoLibre (NASDAQ:MELI) is a one-stop e-commerce marketplace and fintech platform in Latin America.
Why Is MELI a Top Pick?
- Customers are spending more money on its platform as its average revenue per user has increased by 107% annually over the last two years
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 60.4% exceeded its revenue gains over the last three years
- Robust free cash flow margin of 35.9% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
MercadoLibre is trading at $1,734 per share, or 16.8x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
Teledyne (TDY)
Trailing 12-Month GAAP Operating Margin: 18.8%
Playing a role in mapping the ocean floor as we know it today, Teledyne (NYSE:TDY) offers digital imaging and instrumentation products for various industries.
Why Do We Watch TDY?
- Impressive 14.7% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
- TDY is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
Teledyne’s stock price of $648.39 implies a valuation ratio of 27x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Douglas Dynamics (PLOW)
Trailing 12-Month GAAP Operating Margin: 11.2%
Once manufacturing snowplows designed for the iconic jeep vehicle precursor, Douglas Dynamics (NYSE:PLOW) offers snow and ice equipment for the roads and sidewalks.
Why Does PLOW Stand Out?
- Projected revenue growth of 11.4% for the next 12 months indicates demand will rise above its two-year trend
- Business has a stable foundation, supported by its long-term operating margin of 9.4%, and its operating leverage amplified its profits over the last five years
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 50% annually
At $41.25 per share, Douglas Dynamics trades at 16.1x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
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