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.
Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here are two cash-producing companies that excel at turning cash into shareholder value and one best left off your watchlist.
One Stock to Sell:
Live Nation (LYV)
Trailing 12-Month Free Cash Flow Margin: 6.8%
Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE: LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.
Why Are We Wary of LYV?
- Performance surrounding its events has lagged its peers
- Operating margin of 4.1% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.9 percentage points over the next year
At $140.26 per share, Live Nation trades at 60.3x forward P/E. If you’re considering LYV for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Qualcomm (QCOM)
Trailing 12-Month Free Cash Flow Margin: 27.7%
Having been at the forefront of developing the standards for cellular connectivity for over four decades, Qualcomm (NASDAQ: QCOM) is a leading innovator and a fabless manufacturer of wireless technology chips used in smartphones, autos and internet of things appliances.
Why Could QCOM Be a Winner?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 11.3% annual sales growth over the last five years
- Robust free cash flow margin of 30.4% gives it many options for capital deployment
- ROIC punches in at 52.2%, illustrating management’s expertise in identifying profitable investments
Qualcomm is trading at $157.17 per share, or 13.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Monster (MNST)
Trailing 12-Month Free Cash Flow Margin: 24.1%
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ: MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Why Will MNST Outperform?
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 27.3%
- MNST is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures
Monster’s stock price of $63.25 implies a valuation ratio of 33.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. 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.
