American Express Stands Out Amid Profitable Stocks Struggling to Keep Up

American Express stands out as a profitable company that leverages its financial strength to beat competition, while two other companies may struggle to keep up.

Carter's and IBM are among the latter group. Carter's, known for its children's apparel, has seen disappointing same-store sales over the past two years and a poor free cash flow margin of 7.5% for the last two years. This limits its ability to invest in growth initiatives or pay dividends.

Carter's stock price is $35.82, implying a valuation ratio of 10.5x forward P/E. IBM, on the other hand, has seen annual sales growth lag behind its business services peers and anticipated sales growth of only 4.1% for the next year.