A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, here is one cash-producing company that excels at turning cash into shareholder value and two that may struggle to keep up.
Two Stocks to Sell:
Bloomin' Brands (BLMN)
Trailing 12-Month Free Cash Flow Margin: 3%
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?
- Poor same-store sales performance over the past two years indicates it’s having trouble bringing new diners into its restaurants
- Sales are projected to be flat over the next 12 months and imply weak demand
- 6× net-debt-to-EBITDA ratio shows it’s overleveraged and increases the probability of shareholder dilution if things turn unexpectedly
Bloomin' Brands’s stock price of $8.91 implies a valuation ratio of 10.9x forward P/E. Read our free research report to see why you should think twice about including BLMN in your portfolio.
Ziff Davis (ZD)
Trailing 12-Month Free Cash Flow Margin: 20.8%
Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ: ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.
Why Should You Dump ZD?
- Flat sales over the last five years suggest it must find different ways to grow during this cycle
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 9.2 percentage points
- Earnings per share fell by 7% annually over the last five years while its revenue was flat, showing each sale was less profitable
At $51.94 per share, Ziff Davis trades at 10.2x forward P/E. Check out our free in-depth research report to learn more about why ZD doesn’t pass our bar.
One Stock to Buy:
EVERTEC (EVTC)
Trailing 12-Month Free Cash Flow Margin: 20.7%
Operating one of Latin America's leading PIN debit networks called ATH, EVERTEC (NYSE: EVTC) is a payment transaction processor and financial technology provider that enables merchants and financial institutions across Latin America and the Caribbean to accept and process electronic payments.
Why Is EVTC a Top Pick?
- Solid 13.3% annual revenue growth over the last two years indicates its offerings solve complex business issues
- Earnings growth was above the peer group average over the last two years as its EPS compounded at 13% annually
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
EVERTEC is trading at $29.05 per share, or 6.9x forward P/E. Is now the time to initiate a position? Find out in our full 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-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
