Free cash flow is one of the most reliable indicators of financial durability. These businesses not only generate cash but reinvest intelligently to sustain momentum.
Even among businesses with healthy cash flow, only a select few maximize its potential, and we’re here to pinpoint them. That said, here are three cash-producing companies that leverage their financial strength to beat the competition.
DoorDash (DASH)
Trailing 12-Month Free Cash Flow Margin: 16.1%
Founded by Stanford students with the intent to build “the local, on-demand FedEx", DoorDash (NYSE: DASH) operates an on-demand food delivery platform.
Why Should You Buy DASH?
- Orders have increased by an average of 21% annually, giving it the potential for margin-accretive growth if it can develop valuable complementary products and features
- Additional sales over the last three years increased its profitability as the 105% annual growth in its earnings per share outpaced its revenue
- Free cash flow margin increased by 11.3 percentage points over the last few years, giving the company more capital to invest or return to shareholders
DoorDash’s stock price of $208.30 implies a valuation ratio of 31.2x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free.
VeriSign (VRSN)
Trailing 12-Month Free Cash Flow Margin: 57.5%
While the company is not a domain registrar and does not directly sell domain names to end users, Verisign (NASDAQ: VRSN) operates and maintains the infrastructure to support domain names such as .com and .net.
Why Does VRSN Catch Our Eye?
- Winning new contracts that can potentially increase in value as its billings growth has averaged 15.6% over the last year
- Prominent and differentiated software results in a best-in-class gross margin of 87.8%
- Robust free cash flow margin of 57.5% gives it many options for capital deployment
VeriSign is trading at $273.85 per share, or 15.8x forward price-to-sales. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
TJX (TJX)
Trailing 12-Month Free Cash Flow Margin: 6.6%
Initially based on a strategy of buying excess inventory from manufacturers or other retailers, TJX (NYSE: TJX) is an off-price retailer that sells brand-name apparel and other goods at prices much lower than department stores.
Why Is TJX Interesting?
- Same-store sales provide a solid foundation for the steady expansion of its stores
- Locations open for at least a year are seeing increased demand as same-store sales have averaged 4.4% growth over the past two years
- Dominant market position is represented by its $56.99 billion in revenue, which compensates for its subpar gross margin
At $126.70 per share, TJX trades at 27.7x 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free.
