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. 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:

Otis (OTIS)

Trailing 12-Month Free Cash Flow Margin: 11.4%

Credited with inventing the first hydraulic passenger elevator, Otis Worldwide (NYSE: OTIS) is an elevator and escalator manufacturing, installation and service company.

Why Are We Out on OTIS?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Anticipated sales growth of 4.4% for the next year implies demand will be shaky
3. Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.4% annually

Otis is trading at $77.13 per share, or 18.3x forward P/E. If you’re considering OTIS for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Iridium (IRDM)

Trailing 12-Month Free Cash Flow Margin: 34.8%

With a constellation of 66 low-earth orbit satellites providing coverage to every inch of the planet, Iridium Communications (NASDAQ: IRDM) operates a global satellite network that provides voice and data services to customers in remote areas where traditional telecommunications are unavailable.

Why Is IRDM Interesting?

1. Solid 8.4% annual revenue growth over the last five years indicates its offering’s solve complex business issues
2. Adjusted operating profits increased over the last five years as the company gained some leverage on its fixed costs and became more efficient
3. Share repurchases over the last two years enabled its annual earnings per share growth to outpace its revenue gains

Iridium’s stock price of $39.04 implies a valuation ratio of 29.8x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Tradeweb Markets (TW)

Trailing 12-Month Free Cash Flow Margin: 50.7%

Founded in 1996 as one of the pioneers in electronic bond trading, Tradeweb Markets (NASDAQ: TW) builds and operates electronic marketplaces that connect financial institutions for trading across rates, credit, equities, and money markets.

Why Are We Backing TW?

1. Market share has increased this cycle as its 23.4% annual revenue growth over the last two years was exceptional
2. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 23.5% annually

At $111.59 per share, Tradeweb Markets trades at 27.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum - both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks - FREE. Get Our Strong Momentum Stocks for Free HERE.

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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.