While profitability is essential, it doesn’t guarantee long-term success. Some companies that rest on their margins will lose ground as competition intensifies - as Jeff Bezos said, "Your margin is my opportunity".

Profits are valuable, but they’re not everything. At StockStory, we help you identify the companies that have real staying power. That said, here are three profitable companies to steer clear of and a few better alternatives.

Fresh Del Monte Produce (FDP)

Trailing 12-Month GAAP Operating Margin: 3.6%

Translating to "of the mountain" in Spanish, Fresh Del Monte (NYSE:FDP) is a leader in providing high-quality, sustainably grown fresh fruits and vegetables.

Why Is FDP Risky?

1. Sales stagnated over the last three years and signal the need for new growth strategies

2. Commoditized products, bad unit economics, and high competition are reflected in its low gross margin of 8.3%

3. ROIC of 5.1% reflects management’s challenges in identifying attractive investment opportunities

Fresh Del Monte Produce is trading at $34.67 per share, or 12.1x forward price-to-earnings. Read our free research report to see why you should think twice about including FDP in your portfolio, it’s free .

Verizon (VZ)

Trailing 12-Month GAAP Operating Margin: 21.5%

Formed in 1984 as Bell Atlantic after the breakup of Bell System into seven companies, Verizon (NYSE:VZ) is a telecom giant providing a range of communications and internet services.

Why Should You Sell VZ?

1. Underwhelming customer growth over the past two years shows the company faced challenges in winning new contracts

2. Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 2.2 percentage points

3. Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions

At $42.74 per share, Verizon trades at 9.1x forward price-to-earnings. Check out our free in-depth research report to learn more about why VZ doesn’t pass our bar .

Mettler-Toledo (MTD)

Trailing 12-Month GAAP Operating Margin: 29.1%

With roots dating back to the precision balance innovations of Swiss engineer Erhard Mettler, Mettler-Toledo (NYSE:MTD) manufactures precision weighing instruments, analytical equipment, and product inspection systems used in laboratories, industrial settings, and food retail.

Why Do We Think Twice About MTD?

1. Sales stagnated over the last two years and signal the need for new growth strategies

2. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy

3. Sales are projected to be flat over the next 12 months and imply weak demand