3 Cash-Producing Stocks with Open Questions

September 05, 2025 at 00:44 AM EDT

DIS 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 steer clear of and a few better alternatives.

Disney (DIS)

Trailing 12-Month Free Cash Flow Margin: 12.2%

Founded by brothers Walt and Roy, Disney (NYSE: DIS) is a multinational entertainment conglomerate, renowned for its theme parks, movies, television networks, and merchandise.

Why Should You Dump DIS?

Annual sales growth of 3.8% over the last two years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
Capital intensity will likely ramp up in the next year as its free cash flow margin is expected to contract by 4 percentage points
Low returns on capital reflect management’s struggle to allocate funds effectively

Disney is trading at $118.75 per share, or 19.8x forward P/E. To fully understand why you should be careful with DIS, check out our full research report (it’s free).

Covenant Logistics (CVLG)

Trailing 12-Month Free Cash Flow Margin: 4.5%

Started with 25 trucks and 50 trailers, Covenant Logistics (NASDAQ: CVLG) is a provider of expedited long haul freight services, offering a range of logistics solutions.

Why Should You Sell CVLG?

Products and services are facing end-market challenges during this cycle, as seen in its flat sales over the last two years
Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 20.4 percentage points
Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability

Covenant Logistics’s stock price of $24.08 implies a valuation ratio of 11.8x forward EV-to-EBITDA. Dive into our free research report to see why there are better opportunities than CVLG.

CRA (CRAI)

Trailing 12-Month Free Cash Flow Margin: 3%

Often retained for high-stakes matters with multibillion-dollar implications, CRA International (NASDAQ: CRAI) provides economic, financial, and management consulting services to corporations, law firms, and government agencies for litigation, regulatory proceedings, and business strategy.

Why Does CRAI Give Us Pause?

Revenue base of $712.9 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
7.5 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

At $196.68 per share, CRA trades at 23.8x forward P/E. Read our free research report to see why you should think twice about including CRAI in your portfolio.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "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 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 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.

About Us

Additional Information

Website & Technical Help

3 Cash-Producing Stocks with Open Questions

Disney (DIS)

Covenant Logistics (CVLG)

CRA (CRAI)

High-Quality Stocks for All Market Conditions

More News