Not all profitable companies are built to last - some rely on outdated models or unsustainable advantages.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. Keeping that in mind, here is one profitable company that balances growth and profitability and two that may face some trouble.

Two Stocks to Sell:

Texas Instruments (TXN)

Trailing 12-Month GAAP Operating Margin: 34.1%

Headquartered in Dallas, Texas since the 1950s, Texas Instruments (NASDAQ: TXN) is the world’s largest producer of analog semiconductors.

Why Are We Hesitant About TXN?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 4.1% for the last five years
2. Earnings per share fell by 1.8% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
3. Free cash flow margin shrank by 19.6 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive

Texas Instruments’s stock price of $217.92 implies a valuation ratio of 34.9x forward P/E. Check out our free in-depth research report to learn more about why TXN doesn’t pass our bar.

Richardson Electronics (RELL)

Trailing 12-Month GAAP Operating Margin: 1.3%

Founded in 1947, Richardson Electronics (NASDAQ: RELL) is a distributor of power grid and microwave tubes as well as consumables related to those products.

Why Should You Dump RELL?

1. Backlog has dropped by 3.4% on average over the past two years, suggesting it’s losing orders as competition picks up
2. Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of -0.9% for the last five years
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Richardson Electronics is trading at $13.13 per share, or 40.1x forward P/E. Read our free research report to see why you should think twice about including RELL in your portfolio.

One Stock to Watch:

Boeing (BA)

Trailing 12-Month GAAP Operating Margin: 4.8%

One of the companies that forms a duopoly in the commercial aircraft market, Boeing (NYSE: BA) develops, manufactures, and services commercial airplanes, defense products, and space systems.

Why Should BA Be on Your Watchlist?

1. Products are seeing elevated demand as its unit sales averaged 84.6% growth over the past two years
2. Sales outlook for the upcoming 12 months implies the business will have more momentum than most peers
3. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 45.7% annually, topping its revenue gains

At $233.96 per share, Boeing trades at 583.5x 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

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 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.