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.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
The Marzetti Company (MZTI)
Trailing 12-Month Free Cash Flow Margin: 10.7%
Known for its frozen garlic bread and Parkerhouse rolls, The Marzetti Company (NASDAQ: MZTI) sells bread, dressing, and dips to the retail and food service channels.
Why Are We Hesitant About MZTI?
- Muted 4.4% annual revenue growth over the last three years shows its demand lagged behind its consumer staples peers
- Subscale operations are evident in its revenue base of $1.91 billion, meaning it has fewer distribution channels than its larger rivals
- Estimated sales growth of 1.6% for the next 12 months implies demand will slow from its three-year trend
At $184.65 per share, The Marzetti Company trades at 25.8x forward P/E. To fully understand why you should be careful with MZTI, check out our full research report (it’s free).
Two Stocks to Watch:
AMD (AMD)
Trailing 12-Month Free Cash Flow Margin: 11.8%
Founded in 1969 by a group of former Fairchild semiconductor executives led by Jerry Sanders, Advanced Micro Devices (NASDAQ: AMD) is one of the leading designers of computer processors and graphics chips used in PCs and data centers.
Why Do We Like AMD?
- Impressive 16.3% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Exciting sales outlook for the upcoming 12 months calls for 22.7% growth, an acceleration from its two-year trend
- Earnings growth has comfortably beaten the peer group average over the last five years as its EPS has compounded at 32% annually
AMD is trading at $167.96 per share, or 32.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Tenet Healthcare (THC)
Trailing 12-Month Free Cash Flow Margin: 7.5%
With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.
Why Are We Positive On THC?
- Share repurchases over the last five years enabled its annual earnings per share growth of 29.1% to outpace its revenue gains
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its rising returns show it’s making even more lucrative bets
- Returns on capital are growing as management capitalizes on its market opportunities
Tenet Healthcare’s stock price of $180.95 implies a valuation ratio of 13.9x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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 Comfort Systems (+782% 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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