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.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are three cash-producing companies that don’t make the cut and some better opportunities instead.

Clorox (CLX)

Trailing 12-Month Free Cash Flow Margin: 11.4%

Founded in 1913 with bleach as the sole product offering, Clorox (NYSE: CLX) today is a consumer products giant whose product portfolio spans everything from bleach to skincare to salad dressing to kitty litter.

Why Is CLX Not Exciting?

1. Sales stagnated over the last three years and signal the need for new growth strategies
2. Projected sales decline of 2.2% for the next 12 months points to an even tougher demand environment ahead

At $126.90 per share, Clorox trades at 17.5x forward P/E. To fully understand why you should be careful with CLX, check out our full research report (it’s free).

Kraft Heinz (KHC)

Trailing 12-Month Free Cash Flow Margin: 12.4%

The result of a 2015 mega-merger between Kraft and Heinz, Kraft Heinz (NASDAQ: KHC) is a packaged foods giant whose products span coffee to cheese to packaged meat.

Why Is KHC Risky?

1. Declining unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
2. Forecasted revenue decline of 1.5% for the upcoming 12 months implies demand will fall off a cliff
3. Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 11.2 percentage points

Kraft Heinz’s stock price of $27.50 implies a valuation ratio of 10.3x forward P/E. Dive into our free research report to see why there are better opportunities than KHC.

Alight (ALIT)

Trailing 12-Month Free Cash Flow Margin: 4.6%

Born from a corporate spinoff in 2017 to focus on employee experience technology, Alight (NYSE: ALIT) provides human capital management solutions that help companies administer employee benefits, payroll, and workforce management systems.

Why Should You Sell ALIT?

1. Products and services are facing significant end-market challenges during this cycle as sales have declined by 1.9% annually over the last five years
2. Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
3. ROIC of 0.6% reflects management’s challenges in identifying attractive investment opportunities, and its falling returns suggest its earlier profit pools are drying up

Alight is trading at $5.57 per share, or 8.8x forward P/E. Check out our free in-depth research report to learn more about why ALIT doesn’t pass our bar.

Stocks We Like More

Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.

While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our 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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