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 generate reliable profits without sacrificing growth.
RBC Bearings (RBC)
Trailing 12-Month GAAP Operating Margin: 22.4%
With a Guinness World Record for engineering the largest spherical plain bearing, RBC Bearings (NYSE: RBC) is a manufacturer of bearings and related components for the aerospace & defense, industrial, and transportation industries.
Why Will RBC Outperform?
- Impressive 21% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings per share grew by 19.7% annually over the last five years and trumped its peers
- Robust free cash flow margin of 15.6% gives it many options for capital deployment
RBC Bearings’s stock price of $509.15 implies a valuation ratio of 39.5x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
DexCom (DXCM)
Trailing 12-Month GAAP Operating Margin: 17.2%
Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ: DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks.
Why Will DXCM Beat the Market?
- Average organic revenue growth of 16.4% over the past two years demonstrates its ability to expand independently without relying on acquisitions
- Earnings growth has trumped its peers over the last five years as its EPS has compounded at 17.5% annually
- Free cash flow margin grew by 17.5 percentage points over the last five years, giving the company more chips to play with
At $73.10 per share, DexCom trades at 30.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Nelnet (NNI)
Trailing 12-Month GAAP Operating Margin: 33.8%
Starting as a student loan servicer in the 1970s and evolving through the changing landscape of education finance, Nelnet (NYSE: NNI) provides student loan servicing, education technology, payment processing, and banking services while managing a portfolio of education loans.
Why Is NNI a Good Business?
- Market share has increased this cycle as its 18% annual revenue growth over the last two years was exceptional
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- ROE of 10.7% shows management can invest its resources competently
Nelnet is trading at $130.52 per share, or 16x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged 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).
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