While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are three cash-producing companies that don’t make the cut and some better opportunities instead.

Campbell's (CPB)

Trailing 12-Month Free Cash Flow Margin: 6.9%

With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ: CPB) is a packaged food company with an illustrious portfolio of brands.

Why Is CPB Risky?

1. Declining unit sales over the past two years imply it may need to invest in product improvements to get back on track
2. Forecasted revenue decline of 3% for the upcoming 12 months implies demand will fall off a cliff
3. Annual earnings per share growth of 1.6% underperformed its revenue over the last three years, showing its incremental sales were less profitable

At $33.50 per share, Campbell's trades at 13x forward P/E. If you’re considering CPB for your portfolio, see our FREE research report to learn more.

American Express Global Business Travel (GBTG)

Trailing 12-Month Free Cash Flow Margin: 5.9%

Originally spun off from American Express in 2014 but maintaining the Amex GBT brand, Global Business Travel Group (NYSE: GBTG) provides end-to-end business travel and expense management solutions, connecting corporate clients with travel suppliers and offering specialized software services.

Why Are We Hesitant About GBTG?

1. Estimated sales growth of 5% for the next 12 months implies demand will slow from its three-year trend
2. Gross margin of 61.1% is below its competitors, leaving less money to invest in areas like marketing and R&D
3. Lacking free cash flow generation means it has few chances to reinvest for growth, repurchase shares, or distribute capital

American Express Global Business Travel is trading at $7.93 per share, or 1.5x forward price-to-sales. Dive into our free research report to see why there are better opportunities than GBTG.

Valmont (VMI)

Trailing 12-Month Free Cash Flow Margin: 14%

Credited with an invention in the 1950s that improved crop yields, Valmont (NYSE: VMI) provides engineered products and infrastructure services for the agricultural industry.

Why Are We Wary of VMI?

1. 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
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.9%
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 6.8% annually

Valmont’s stock price of $377.65 implies a valuation ratio of 23.3x forward EV-to-EBITDA. To fully understand why you should be careful with VMI, check out our full research report (it’s free).

Stocks We Like More

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