Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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 leverages its financial strength to beat the competition and two that may face some trouble.

Two Stocks to Sell:

Levi's (LEVI)

Trailing 12-Month GAAP Operating Margin: 8.8%

Credited for inventing the first pair of blue jeans in 1873, Levi's (NYSE: LEVI) is an apparel company renowned for its iconic denim products and classic American style.

Why Are We Out on LEVI?

1. Constant currency revenue growth has disappointed over the past two years and shows demand was soft
2. Anticipated sales growth of 2.6% for the next year implies demand will be shaky
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Levi’s stock price of $22.40 implies a valuation ratio of 17.7x forward P/E. Dive into our free research report to see why there are better opportunities than LEVI.

Allstate (ALL)

Trailing 12-Month GAAP Operating Margin: 9.6%

Born from a Sears, Roebuck & Co. initiative during the Great Depression with its famous "You're in good hands" slogan, Allstate (NYSE: ALL) is one of America's largest personal property and casualty insurers, offering protection for autos, homes, and personal property.

Why Do We Think Twice About ALL?

1. Estimated sales growth of 4.1% for the next 12 months implies demand will slow from its two-year trend
2. Costs have risen faster than its revenue over the last four years, causing its combined ratio to worsen by 4.8 percentage points
3. Book value per share stagnated over the last five years, limiting its ability to leverage its balance sheet to make additional investments

At $196 per share, Allstate trades at 2.3x forward P/B. Check out our free in-depth research report to learn more about why ALL doesn’t pass our bar.

One Stock to Buy:

Synchrony Financial (SYF)

Trailing 12-Month GAAP Operating Margin: 29.6%

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 Beat the Market?

1. Share buybacks catapulted its annual earnings per share growth to 23.8%, which outperformed its revenue gains over the last five years
2. Annual tangible book value per share growth of 21.7% over the last two years was superb and indicates its capital strength increased during this cycle
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

Synchrony Financial is trading at $75.70 per share, or 8.7x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% 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

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