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 struggle to keep up.
One Stock to Sell:
Albany (AIN)
Trailing 12-Month Free Cash Flow Margin: 11.8%
Founded in 1895, Albany (NYSE:AIN) is a global textiles and materials processing company, specializing in machine clothing for paper mills and engineered composite structures for aerospace and other industries.
Why Do We Pass on AIN?
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Sales trends were unexciting over the last five years as its 3% annual growth was below the typical industrials company
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Efficiency has decreased over the last five years as its operating margin fell by 9 percentage points
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Earnings per share fell by 5.6% annually over the last five years while its revenue grew, showing its incremental sales were much less profitable
Albany is trading at $63.44 per share, or 10.2x forward EV-to-EBITDA. If you’re considering AIN for your portfolio, see our FREE research report to learn more .
Two Stocks to Buy:
Restaurant Brands (QSR)
Trailing 12-Month Free Cash Flow Margin: 15.5%
Formed through a strategic merger, Restaurant Brands International (NYSE:QSR) is a multinational corporation that owns three iconic fast-food chains: Burger King, Tim Hortons, and Popeyes.
Why Is QSR a Good Business?
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Same-store sales growth averaged 5.3% over the past two years, showing it’s bringing new and repeat diners into its restaurants
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Excellent operating margin of 29% highlights the efficiency of its business model
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Strong free cash flow margin of 16.2% enables it to reinvest or return capital consistently
Restaurant Brands’s stock price of $66.70 implies a valuation ratio of 18x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free .
Howmet (HWM)
Trailing 12-Month Free Cash Flow Margin: 13.5%
Inventing the first forged aluminum truck wheel, Howmet (NYSE:HWM) specializes in lightweight metals engineering and manufacturing multi-material components used in vehicles.
Why Do We Love HWM?
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Market share has increased this cycle as its 12.7% annual revenue growth over the last two years was exceptional
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Share repurchases over the last two years enabled its annual earnings per share growth of 40.3% to outpace its revenue gains
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Free cash flow margin jumped by 12.6 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
At $154.60 per share, Howmet trades at 45.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free .
Stocks We Like Even More
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week . This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free .