Laser Focus World is an industry bedrock—first published in 1965 and still going strong. We publish original articles about cutting-edge advances in lasers, optics, photonics, sensors, and quantum technologies, as well as test and measurement, and the shift currently underway to usher in the photonic integrated circuits, optical interconnects, and copackaged electronics and photonics to deliver the speed and efficiency essential for data centers of the future.

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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

3 Cash-Producing Stocks Walking a Fine Line

LZB Cover Image

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.

Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are three cash-producing companies to avoid and some better opportunities instead.

La-Z-Boy (LZB)

Trailing 12-Month Free Cash Flow Margin: 5.3%

The prized possession of every mancave, La-Z-Boy (NYSE: LZB) is a furniture company specializing in recliners, sofas, and seats.

Why Are We Out on LZB?

  1. Annual revenue declines of 8% over the last two years indicate problems with its market positioning
  2. Estimated sales growth of 1.8% for the next 12 months is soft and implies weaker demand
  3. Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

La-Z-Boy’s stock price of $40.26 implies a valuation ratio of 12x forward P/E. If you’re considering LZB for your portfolio, see our FREE research report to learn more.

Woodward (WWD)

Trailing 12-Month Free Cash Flow Margin: 9.4%

Initially designing controls for water wheels in the early 1900s, Woodward (NASDAQ: WWD) designs, services, and manufactures energy control products and optimization solutions.

Why Does WWD Fall Short?

  1. Sales trends were unexciting over the last five years as its 2.8% annual growth was below the typical industrials company
  2. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 3.1% annually
  3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 12.9 percentage points

At $233.23 per share, Woodward trades at 35.2x forward P/E. Read our free research report to see why you should think twice about including WWD in your portfolio.

Vontier (VNT)

Trailing 12-Month Free Cash Flow Margin: 12.4%

A spin-off of a spin-off, Vontier (NYSE: VNT) provides electronic products and systems to the transportation, automotive, and manufacturing sectors.

Why Do We Think VNT Will Underperform?

  1. Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
  2. 14.8 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
  3. Waning returns on capital imply its previous profit engines are losing steam

Vontier is trading at $36.74 per share, or 11.6x forward P/E. Check out our free in-depth research report to learn more about why VNT doesn’t pass our bar.

Stocks We Like More

The market surged in 2024 and reached record highs after Donald Trump’s presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025.

While the crowd speculates what might happen next, we’re homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver’s seat and build a durable portfolio by checking out our Top 9 Market-Beating Stocks. 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.

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