Cash-generating companies often have the flexibility to invest, return capital to shareholders, or navigate downturns. The best of these businesses not only accumulate cash but deploy it strategically for growth.
Identifying the most effective companies isn’t easy, and that’s why we started StockStory. Keeping that in mind, here are three cash-producing companies that leverage their financial strength to beat the competition.
Allison Transmission (ALSN)
Trailing 12-Month Free Cash Flow Margin: 20.4%
Helping build race cars at one point, Allison Transmission (NYSE: ALSN) offers transmissions to original equipment manufacturers and fleet operators.
Why Do We Like ALSN?
- Offerings are mission-critical for businesses and lead to a best-in-class gross margin of 47.9%
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 29.3%, and its profits increased over the last five years as it scaled
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Allison Transmission’s stock price of $87.74 implies a valuation ratio of 12.8x forward EV-to-EBITDA. Is now a good time to buy? Find out in our full research report, it’s free.
Insulet (PODD)
Trailing 12-Month Free Cash Flow Margin: 16.8%
Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ: PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line.
Why Are We Bullish on PODD?
- Steady constant currency growth over the past two years shows the company can pursue its global ambitions, even in uncertain economic times
- Free cash flow margin increased by 25.4 percentage points over the last five years, giving the company more capital to invest or return to shareholders
- Improving returns on capital reflect management’s ability to monetize investments
At $337.99 per share, Insulet trades at 71.1x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Astrana Health (ASTH)
Trailing 12-Month Free Cash Flow Margin: 5%
Formerly known as Apollo Medical Holdings until early 2024, Astrana Health (NASDAQ: ASTH) operates a technology-powered healthcare platform that enables physicians to deliver coordinated care while successfully participating in value-based payment models.
Why Does ASTH Stand Out?
- Annual revenue growth of 36.6% over the past two years was outstanding, reflecting market share gains this cycle
- Projected revenue growth of 59.1% for the next 12 months is above its two-year trend, pointing to accelerating demand
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 19.6% annually
Astrana Health is trading at $31.33 per share, or 13.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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