1 Profitable Stock to Own for Decades and 2 We Avoid

Barchart·04/10/2026 06:54:16

Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.

Not all profitable companies are created equal, and that’s why we built StockStory - to help you find the ones that truly shine bright. That said, 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:

Qualys (QLYS)

Trailing 12-Month GAAP Operating Margin: 33.2%

Originally developed to address the growing complexity of IT security in the cloud era, Qualys (NASDAQ:QLYS) provides a cloud-based platform that helps organizations identify, manage, and protect their IT assets from cyber threats across on-premises, cloud, and mobile environments.

Why Are We Cautious About QLYS?

1. Customers had second thoughts about committing to its platform over the last year as its average billings growth of 8.3% underwhelmed
2. Estimated sales growth of 7.8% for the next 12 months implies demand will slow from its two-year trend
3. Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient

At $76.55 per share, Qualys trades at 4.4x forward price-to-sales. Read our free research report to see why you should think twice about including QLYS in your portfolio.

Dollar Tree (DLTR)

Trailing 12-Month GAAP Operating Margin: 8.6%

A treasure hunt because there’s no guarantee of consistent product selection, Dollar Tree (NASDAQ:DLTR) is a discount retailer that sells general merchandise and select packaged food at extremely low prices.

Why Is DLTR Not Exciting?

1. Annual revenue declines of 11.8% over the last three years indicate problems with its market positioning
2. Conservative approach to adding new stores shows management is focused on improving existing location performance
3. Low returns on capital reflect management’s struggle to allocate funds effectively

Dollar Tree’s stock price of $102.32 implies a valuation ratio of 15.7x forward P/E. Dive into our free research report to see why there are better opportunities than DLTR.

One Stock to Buy:

Badger Meter (BMI)

Trailing 12-Month GAAP Operating Margin: 20%

The developer of the world’s first frost-proof water meter in 1905, Badger Meter (NYSE:BMI) provides water control and measure equipment to various industries.

Why Are We Backing BMI?

1. Annual revenue growth of 16.6% over the last five years was superb and indicates its market share increased during this cycle
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 23.6% over the last two years outstripped its revenue performance
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute

Badger Meter is trading at $155.41 per share, or 30.4x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

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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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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