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 reinvest wisely to drive long-term success and one that may face some trouble.
One Stock to Sell:
Belden (BDC)
Trailing 12-Month Free Cash Flow Margin: 8.2%
With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE: BDC) designs, manufactures, and sells electronic components to various industries.
Why Are We Hesitant About BDC?
- Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
- Anticipated sales growth of 5% for the next year implies demand will be shaky
- Flat earnings per share over the last two years underperformed the sector average
Belden is trading at $118.17 per share, or 15.6x forward P/E. Dive into our free research report to see why there are better opportunities than BDC.
Two Stocks to Watch:
Yum! Brands (YUM)
Trailing 12-Month Free Cash Flow Margin: 19.4%
Spun off as an independent company from PepsiCo, Yum! Brands (NYSE: YUM) is a multinational corporation that owns KFC, Pizza Hut, Taco Bell, and The Habit Burger Grill.
Why Could YUM Be a Winner?
- Fast expansion of new restaurants indicates an aggressive approach to attacking untapped market opportunities
- Highly efficient business model is illustrated by its impressive 31.9% operating margin
- YUM is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Yum! Brands’s stock price of $148.53 implies a valuation ratio of 23.9x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
CBIZ (CBZ)
Trailing 12-Month Free Cash Flow Margin: 4.3%
With over 120 offices across 33 states and a team of more than 6,700 professionals, CBIZ (NYSE: CBZ) provides accounting, tax, benefits, insurance brokerage, and advisory services to help small and mid-sized businesses manage their finances and operations.
Why Does CBZ Stand Out?
- Annual revenue growth of 26.6% over the last two years was superb and indicates its market share increased during this cycle
- Market share will likely rise over the next 12 months as its expected revenue growth of 20.1% is robust
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 29.6% annually
At $53.54 per share, CBIZ trades at 14.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even 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 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-small-cap company Exlservice (+354% 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
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