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.
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 to avoid and some better opportunities instead.
Ford (F)
Trailing 12-Month Free Cash Flow Margin: 5.5%
Established to make automobiles accessible to a broader segment of the population, Ford (NYSE: F) designs, manufactures, and sells a variety of automobiles, trucks, and electric vehicles.
Why Should You Dump F?
- Flat vehicles sold over the past two years indicate demand is soft and that the company may need to revise its strategy
- Waning returns on capital imply its previous profit engines are losing steam
- 9× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
Ford’s stock price of $12.65 implies a valuation ratio of 9.7x forward P/E. Read our free research report to see why you should think twice about including F in your portfolio.
Progyny (PGNY)
Trailing 12-Month Free Cash Flow Margin: 15.3%
Pioneering a data-driven approach to family building that has achieved an industry-leading patient satisfaction score of +80, Progyny (NASDAQ: PGNY) provides comprehensive fertility and family building benefits solutions to employers, helping employees access quality fertility treatments and support services.
Why Does PGNY Worry Us?
- Subscale operations are evident in its revenue base of $1.24 billion, meaning it has fewer distribution channels than its larger rivals
- Estimated sales growth of 4.8% for the next 12 months implies demand will slow from its two-year trend
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Progyny is trading at $21 per share, or 12.3x forward P/E. If you’re considering PGNY for your portfolio, see our FREE research report to learn more.
Diebold Nixdorf (DBD)
Trailing 12-Month Free Cash Flow Margin: 4.9%
With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE: DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.
Why Does DBD Fall Short?
- Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.8% annually over the last five years
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
At $58.21 per share, Diebold Nixdorf trades at 13.4x forward P/E. Check out our free in-depth research report to learn more about why DBD doesn’t pass our bar.
Stocks We Like More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. 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
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
