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. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may struggle to keep up.
One Stock to Sell:
Bloomin' Brands (BLMN)
Trailing 12-Month Free Cash Flow Margin: 2.4%
Owner of the iconic Australian-themed Outback Steakhouse, Bloomin’ Brands (NASDAQ: BLMN) is a leading American restaurant company that owns and operates a portfolio of popular restaurant brands.
Why Are We Out on BLMN?
- Disappointing same-store sales over the past two years show customers aren’t responding well to its menu offerings and dining experience
- Sales are projected to be flat over the next 12 months and imply weak demand
- Challenging supply chain dynamics and bad unit economics are reflected in its low gross margin of 15.7%
Bloomin' Brands is trading at $5.76 per share, or 6.9x forward P/E. Dive into our free research report to see why there are better opportunities than BLMN.
Two Stocks to Buy:
Matador Resources (MTDR)
Trailing 12-Month Free Cash Flow Margin: 15.7%
Operating primarily in the Delaware Basin where multiple oil-bearing layers lie stacked thousands of feet deep, Matador Resources (NYSE: MTDR) explores for, drills, and produces oil and natural gas from underground rock formations in New Mexico and Texas.
Why Should You Buy MTDR?
- Annual revenue growth of 26.4% over the past ten years was outstanding, reflecting market share gains this cycle
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 82.5%
- Strong free cash flow margin of 23.8% enables it to reinvest or return capital consistently
Matador Resources’s stock price of $59.64 implies a valuation ratio of 8.2x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Northern Oil and Gas (NOG)
Trailing 12-Month Free Cash Flow Margin: 17.8%
Taking the path less traveled in the oil industry by choosing not to operate its own wells, Northern Oil and Gas (NYSE: NOG) acquires minority stakes in oil and gas wells operated by other companies across major U.S. shale basins.
Why Do We Love NOG?
- Market share has increased this cycle as its 28.9% annual revenue growth over the last ten years was exceptional
- Attractive asset base leads to wonderful unit economics and a best-in-class gross margin of 81%
- Robust free cash flow margin of 25.6% gives it many options for capital deployment
At $27.35 per share, Northern Oil and Gas trades at 7.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
