A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Campbell's (CPB)
Trailing 12-Month Free Cash Flow Margin: 7.1%
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 Does CPB Worry Us?
- Falling unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Sales are projected to remain flat over the next 12 months as demand decelerates from its three-year trend
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 3.6 percentage points
At $31.91 per share, Campbell's trades at 10.4x forward P/E. If you’re considering CPB for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
ResMed (RMD)
Trailing 12-Month Free Cash Flow Margin: 31.2%
Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE: RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use.
Why Could RMD Be a Winner?
- Average constant currency growth of 12% over the past two years demonstrates its ability to grow internationally despite currency fluctuations
- Additional sales over the last five years increased its profitability as the 15.7% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 7.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders
ResMed’s stock price of $250.88 implies a valuation ratio of 24.7x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
HCA Healthcare (HCA)
Trailing 12-Month Free Cash Flow Margin: 6.9%
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
Why Will HCA Outperform?
- Dominant market position is represented by its $71.59 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Share buybacks catapulted its annual earnings per share growth to 20.7%, which outperformed its revenue gains over the last five years
- ROIC punches in at 28.2%, illustrating management’s expertise in identifying profitable investments
HCA Healthcare is trading at $376.86 per share, or 14.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.
While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
