A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

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 to avoid and some better opportunities instead.

Cushman & Wakefield (CWK)

Trailing 12-Month Free Cash Flow Margin: 1.3%

With expertise in the commercial real estate sector, Cushman & Wakefield (NYSE: CWK) is a global Chicago-based real estate firm offering a comprehensive range of services to clients.

Why Do We Think CWK Will Underperform?

1. Sales tumbled by 2.4% annually over the last two years, showing consumer trends are working against its favor
2. Incremental sales over the last five years were much less profitable as its earnings per share fell by 7.5% annually while its revenue grew
3. Below-average returns on capital indicate management struggled to find compelling investment opportunities

Cushman & Wakefield’s stock price of $11.67 implies a valuation ratio of 10.4x forward P/E. To fully understand why you should be careful with CWK, check out our full research report (it’s free).

Diebold Nixdorf (DBD)

Trailing 12-Month Free Cash Flow Margin: 4.1%

With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE: DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.

Why Does DBD Worry Us?

1. Annual sales declines of 2.9% for the past five years show its products and services struggled to connect with the market during this cycle
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Negative returns on capital show management lost money while trying to expand the business

Diebold Nixdorf is trading at $57.78 per share, or 14.7x forward P/E. Read our free research report to see why you should think twice about including DBD in your portfolio.

DXC (DXC)

Trailing 12-Month Free Cash Flow Margin: 5.3%

Born from the 2017 merger of Computer Sciences Corporation and HP Enterprise's services business, DXC Technology (NYSE: DXC) is a global IT services company that helps businesses transform their technology infrastructure, applications, and operations.

Why Is DXC Risky?

1. Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
2. Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
3. Low returns on capital reflect management’s struggle to allocate funds effectively, and its decreasing returns suggest its historical profit centers are aging

At $14.59 per share, DXC trades at 4.3x forward P/E. Check out our free in-depth research report to learn more about why DXC doesn’t pass our bar.

Stocks We Like More

Donald Trump’s April 2024 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum 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

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.