Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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.
Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. Keeping that in mind, here are three profitable companies that don’t make the cut and some better opportunities instead.
Dine Brands (DIN)
Trailing 12-Month GAAP Operating Margin: 17.1%
Operating a franchise model, Dine Brands (NYSE: DIN) is a casual restaurant chain that owns the Applebee’s and IHOP banners.
Why Should You Dump DIN?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 6.7 percentage points
- High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Dine Brands is trading at $34.57 per share, or 7.1x forward P/E. Read our free research report to see why you should think twice about including DIN in your portfolio.
Hilton Grand Vacations (HGV)
Trailing 12-Month GAAP Operating Margin: 8.5%
Spun off from Hilton Worldwide in 2017, Hilton Grand Vacations (NYSE: HGV) is a global timeshare company that provides travel experiences for its customers through its timeshare resorts and club membership programs.
Why Are We Out on HGV?
- Number of conducted tours has disappointed over the past two years, indicating weak demand for its offerings
- Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value
Hilton Grand Vacations’s stock price of $45.17 implies a valuation ratio of 10.9x forward P/E. To fully understand why you should be careful with HGV, check out our full research report (it’s free for active Edge members).
Vontier (VNT)
Trailing 12-Month GAAP Operating Margin: 18.3%
A spin-off of a spin-off, Vontier (NYSE: VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.
Why Do We Think VNT Will Underperform?
- Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
- Projected sales for the next 12 months are flat and suggest demand will be subdued
- Diminishing returns on capital suggest its earlier profit pools are drying up
At $38.07 per share, Vontier trades at 11.4x forward P/E. Dive into our free research report to see why there are better opportunities than VNT.
Stocks We Like More
Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
