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.
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 leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
Ryder (R)
Trailing 12-Month Free Cash Flow Margin: 5.4%
As one of the first companies to introduce the idea of leasing trucks, Ryder (NYSE:R) provides rental vehicles to businesses and delivers packages directly to homes or businesses.
Why Are We Hesitant About R?
- The company has faced growth challenges as its 2.4% annual revenue increases over the last two years fell short of other industrials companies
- High input costs result in an inferior gross margin of 19.7% that must be offset through higher volumes
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
Ryder is trading at $249.55 per share, or 15.1x forward P/E. Check out our free in-depth research report to learn more about why R doesn’t pass our bar.
Two Stocks to Watch:
ITT (ITT)
Trailing 12-Month Free Cash Flow Margin: 10.9%
Playing a crucial role in the development of the first transatlantic television transmission in 1956, ITT (NYSE:ITT) provides motion and fluid handling equipment for various industries.
Why Should You Buy ITT?
- Annual revenue growth of 16.9% over the past two years was outstanding, reflecting market share gains this cycle
- Demand for the next 12 months is expected to accelerate above its two-year trend as Wall Street forecasts robust revenue growth of 23%
- Earnings per share grew by 17% annually over the last two years, massively outpacing its peers
At $210.65 per share, ITT trades at 23.3x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stryker (SYK)
Trailing 12-Month Free Cash Flow Margin: 18.2%
With over 150 million patients impacted annually through its innovative healthcare technologies, Stryker (NYSE:SYK) develops and manufactures advanced medical devices and equipment across orthopedics, surgical tools, neurotechnology, and patient care solutions.
Why Are We Fans of SYK?
- Core business can prosper without any help from acquisitions as its organic revenue growth averaged 9.2% over the past two years
- Revenue base of $25.84 billion gives it economies of scale and some negotiating power
- Free cash flow margin grew by 6.5 percentage points over the last five years, giving the company more chips to play with
Stryker’s stock price of $331.52 implies a valuation ratio of 20.6x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.