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 that may struggle to keep up.

One Stock to Sell:

Wendy's (WEN)

Trailing 12-Month Free Cash Flow Margin: 11.5%

Founded by Dave Thomas in 1969, Wendy’s (NASDAQ: WEN) is a renowned fast-food chain known for its fresh, never-frozen beef burgers, flavorful menu options, and commitment to quality.

Why Is WEN Not Exciting?

1. Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
2. Projected sales decline of 2.2% for the next 12 months points to a tough demand environment ahead
3. 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings

At $9.42 per share, Wendy's trades at 9.6x forward P/E. Read our free research report to see why you should think twice about including WEN in your portfolio.

Two Stocks to Watch:

Intuit (INTU)

Trailing 12-Month Free Cash Flow Margin: 32.3%

Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ: INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.

Why Do We Like INTU?

1. Billings have averaged 17.5% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
2. Software platform has product-market fit given the rapid recovery of its customer acquisition costs
3. Excellent operating margin of 26.1% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage

Intuit’s stock price of $682.80 implies a valuation ratio of 9.1x forward price-to-sales. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.

Copart (CPRT)

Trailing 12-Month Free Cash Flow Margin: 26.5%

Starting as a single salvage yard in California in 1982, Copart (NASDAQ: CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.

Why Should You Buy CPRT?

1. Impressive 16.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Incremental sales significantly boosted profitability as its annual earnings per share growth of 20% over the last five years outstripped its revenue performance
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its recently improved profitability means it has even more resources to invest or distribute

Copart is trading at $44.92 per share, or 26.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

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 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-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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