Profitability is a key measure of business strength. Companies with high margins have proven they can generate consistent earnings while maintaining financial discipline.
Not all profitable companies are worth your attention, but we’re here to highlight the ones with the most upside. That said, here are three profitable companies that balance growth and profitability.
Veeva Systems (VEEV)
Trailing 12-Month GAAP Operating Margin: 28.7%
Originally named "Verticals onDemand" before rebranding in 2009, Veeva Systems (NYSE:VEEV) provides cloud software, data solutions, and consulting services that help life sciences companies develop and bring products to market more efficiently.
Why Could VEEV Be a Winner?
- User-friendly software enables clients to ramp up spending quickly, leading to the speedy recovery of customer acquisition costs
- Healthy operating margin of 28.7% shows it’s a well-run company with efficient processes, and it turbocharged its profits by achieving some fixed cost leverage
- Strong free cash flow margin of 43.4% enables it to reinvest or return capital consistently
Veeva Systems’s stock price of $173 implies a valuation ratio of 7.3x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
APi (APG)
Trailing 12-Month GAAP Operating Margin: 7%
Started in 1926 as an insulation contractor, APi (NYSE:APG) provides life safety solutions and specialty services for buildings and infrastructure.
Why Is APG a Top Pick?
- Market share has increased this cycle as its 18.6% annual revenue growth over the last five years was exceptional
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 18.4% outpaced its revenue gains
- Free cash flow margin grew by 8.7 percentage points over the last five years, giving the company more chips to play with
APi is trading at $46.38 per share, or 26.3x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Synchrony Financial (SYF)
Trailing 12-Month GAAP Operating Margin: 33.2%
Powering over 73 million active accounts and partnerships with major brands like Amazon, PayPal, and Lowe's, Synchrony Financial (NYSE:SYF) provides credit cards, installment loans, and banking products through partnerships with retailers, healthcare providers, and digital platforms.
Why Will SYF Outperform?
- Earnings per share grew by 37.9% annually over the last two years and trumped its peers
- Balance sheet strength has increased this cycle as its 15.9% annual tangible book value per share growth over the last five years was exceptional
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
At $76.08 per share, Synchrony Financial trades at 7.9x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
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