Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here are two cash-producing companies that excel at turning cash into shareholder value and one that may struggle to keep up.
One Stock to Sell:
Pitney Bowes (PBI)
Trailing 12-Month Free Cash Flow Margin: 22.1%
With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.
Why Are We Hesitant About PBI?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 12.6% annually over the last five years
- Sales are projected to tank by 2% over the next 12 months as its demand continues evaporating
Pitney Bowes’s stock price of $15.68 implies a valuation ratio of 9.5x forward P/E. To fully understand why you should be careful with PBI, check out our full research report (it’s free).
Two Stocks to Buy:
Snowflake (SNOW)
Trailing 12-Month Free Cash Flow Margin: 23.2%
Named after the unique architecture of its data warehouse which resembles a snowflake pattern, Snowflake (NYSE: SNOW) provides a cloud-based data platform that enables organizations to consolidate, analyze, and share data across multiple cloud providers.
Why Are We Bullish on SNOW?
- Billings have averaged 31.4% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Market share will likely rise over the next 12 months as its expected revenue growth of 28.2% is robust
- Software platform has product-market fit given the rapid recovery of its customer acquisition costs
At $240.91 per share, Snowflake trades at 9.4x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
BWX (BWXT)
Trailing 12-Month Free Cash Flow Margin: 9.7%
Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE: BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.
Why Are We Backing BWXT?
- Market share has increased this cycle as its 15.5% annual revenue growth over the last two years was exceptional
- Expected revenue growth of 14.7% for the next year suggests its market share will rise
- Free cash flow margin grew by 8.7 percentage points over the last five years, giving the company more chips to play with
BWX is trading at $199.51 per share, or 41.7x 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
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
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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 Exlservice (+354% five-year return). Find your next big winner with StockStory today.
