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

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here are two cash-producing companies that excel at turning cash into shareholder value and one that may face some trouble.

One Stock to Sell:

DigitalBridge (DBRG)

Trailing 12-Month Free Cash Flow Margin: 189%

Transforming from a traditional real estate investor to a digital-focused powerhouse in 2021, DigitalBridge Group (NYSE: DBRG) is a global digital infrastructure investment firm that manages capital and operates assets across data centers, cell towers, fiber networks, and edge infrastructure.

Why Is DBRG Not Exciting?

1. Annual sales declines of 37.5% for the past five years show its products and services struggled to connect with the market during this cycle
2. Below-average return on equity indicates management struggled to find compelling investment opportunities
3. EBITDA losses may force it to accept punitive lending terms or high-cost debt

DigitalBridge is trading at $9.73 per share, or 1.2x forward P/E. To fully understand why you should be careful with DBRG, check out our full research report (it’s free for active Edge members).

Two Stocks to Watch:

Hims & Hers Health (HIMS)

Trailing 12-Month Free Cash Flow Margin: 5.4%

Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE: HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.

Why Should HIMS Be on Your Watchlist?

1. Customer trends over the past two years show it’s maintaining a steady flow of new contracts that can potentially increase in value over time
2. Free cash flow margin increased by 21.3 percentage points over the last five years, giving the company more capital to invest or return to shareholders
3. Historical investments are beginning to pay off as its returns on capital are growing

At $39.90 per share, Hims & Hers Health trades at 36.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.

Morningstar (MORN)

Trailing 12-Month Free Cash Flow Margin: 16.5%

Founded in 1984 by Joe Mansueto with just $80,000 in personal savings, Morningstar (NASDAQ: MORN) provides independent investment data, research, and analysis tools that help investors, advisors, and institutions make informed financial decisions.

Why Will MORN Beat the Market?

1. Solid 12.3% annual revenue growth over the last five years indicates its offering’s solve complex business issues
2. Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
3. Stellar return on equity showcases management’s ability to surface highly profitable business ventures

Morningstar’s stock price of $216.93 implies a valuation ratio of 21.4x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check 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 244% over the last five years (as of June 30, 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 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. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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