1 Profitable Stock to Keep an Eye On and 2 Facing Challenges
Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages. Just because a business is in the green today doesn’t mean it will thrive tomorrow.
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 is one profitable company that balances growth and profitability and two that may struggle to keep up.
Two Stocks to Sell:
Fortune Brands (FBIN)
Trailing 12-Month GAAP Operating Margin: 12.8%
Targeting a wide customer base of residential and commercial customers, Fortune Brands (NYSE:FBIN) makes plumbing, security, and outdoor living products.
Why Do We Steer Clear of FBIN?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Expenses have increased as a percentage of revenue over the last five years as its operating margin fell by 10.4 percentage points
- Incremental sales over the last five years were much less profitable as its earnings per share fell by 5.3% annually while its revenue grew
Fortune Brands’s stock price of $50.22 implies a valuation ratio of 12.6x forward P/E. To fully understand why you should be careful with FBIN, check out our full research report (it’s free for active Edge members).
Markel Group (MKL)
Trailing 12-Month GAAP Operating Margin: 18.5%
Often referred to as a "mini Berkshire Hathaway" for its three-engine business model of insurance, investments, and wholly-owned businesses, Markel Group (NYSE:MKL) is a specialty insurance company that underwrites complex risks, manages investment portfolios, and owns a diverse collection of operating businesses.
Why Are We Hesitant About MKL?
- Large revenue base constrains its growth potential, as seen in its unexciting 2.4% annualized increases in net premiums earned over the last two years fell below our expectations for the insurance sector
- Projected sales decline of 2.2% for the next 12 months points to a tough demand environment ahead
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 13.2% annually
Markel Group is trading at $2,049 per share, or 1.4x forward P/B. If you’re considering MKL for your portfolio, see our FREE research report to learn more.
One Stock to Watch:
Installed Building Products (IBP)
Trailing 12-Month GAAP Operating Margin: 12.6%
Founded in 1977, Installed Building Products (NYSE:IBP) is a company specializing in the installation of insulation, waterproofing, and other complementary building products for residential and commercial construction.
Why Does IBP Stand Out?
- Annual revenue growth of 13% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its rising returns show it’s making even more lucrative bets
At $268.15 per share, Installed Building Products trades at 25x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.