2 Lucrative Stocks Worth Considering Today and 1 Encountering Difficulties

Profitability Isn’t the Whole Story

While making a profit is crucial for any business, it doesn't automatically ensure lasting success. Companies that become complacent with their profit margins may find themselves outpaced as rivals become more aggressive—echoing Jeff Bezos’s sentiment: “Your margin is my opportunity.”

Although strong earnings are important, they’re just one piece of the puzzle. At StockStory, our goal is to help you spot businesses with genuine long-term potential. With that in mind, let’s examine two companies using their financial health to outperform competitors, and one that could be facing headwinds.

Stock to Consider Selling

Home Depot (HD)

Latest 12-Month GAAP Operating Margin: 13%

Based in Atlanta, Georgia, Home Depot (NYSE:HD) is a leading retailer specializing in home improvement products, offering everything from tools and appliances to construction materials.

Where Does Home Depot Fall Short?

• Over the past two years, same-store sales have lagged, suggesting customers are not fully satisfied with the current product range and in-store experience.
• Because Home Depot’s offerings are widely available elsewhere, the company faces intense competition, resulting in a relatively low gross margin of 33.4%, which it must compensate for with higher sales volume.
• Looking at the last three years, incremental sales have been less profitable, with earnings per share declining at an average rate of 3.3% per year.

Currently, Home Depot shares trade at $382.03, reflecting a forward price-to-earnings ratio of 25.7.

Two Stocks Worth Watching

Northwest Pipe (NWPX)

Latest 12-Month GAAP Operating Margin: 9.3%

Northwest Pipe (NASDAQ:NWPX) plays a pivotal role in Texas’s Integrated Pipeline (IPL) project, which delivers approximately 350 million gallons of water daily. The company manufactures essential pipeline systems for water infrastructure projects.

What Makes Northwest Pipe Stand Out?

• Over the past five years, annual revenue has grown by an impressive 12.5%, signaling increased market share during this period.
• Share buybacks in the last two years have helped boost annual earnings per share by 19.9%, outpacing revenue growth.
• Free cash flow margin has improved by 13.7 percentage points over five years, providing more resources for reinvestment or shareholder returns.

Northwest Pipe is currently priced at $74.28 per share, with a forward P/E of 19.

GE Aerospace (GE)

Latest 12-Month GAAP Operating Margin: 20.1%

General Electric (NYSE:GE), one of the original Dow Jones Industrial Average members, is a global conglomerate delivering technology solutions across aviation, energy, renewables, and healthcare sectors.

Why Does GE Shine?

• GE has captured additional market share this cycle, with annual revenue climbing 15.3% over the past five years.
• Share repurchases have significantly enhanced shareholder value, with annual earnings per share surging 47.1% over the last two years—well above revenue growth.
• The company generates robust free cash flow, giving it the flexibility to fund growth initiatives or return capital to investors.

GE Aerospace is trading at $320.76 per share, equating to a forward P/E of 41.4.

Discover Even More Promising Stocks

Don’t let your investments be anchored to outdated trends. The risk of holding overcrowded stocks is increasing every day.

The next generation of high-growth companies can be found in our Top 5 Growth Stocks for this month. This carefully selected group of High Quality stocks has delivered a remarkable 244% return over the past five years (as of June 30, 2025).

Our 2020 picks included now-household names like Nvidia (up 1,326% from June 2020 to June 2025) and lesser-known companies such as Exlservice, which achieved a 354% five-year return. Start your search for the next breakout stock with StockStory today.