A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
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 excel at turning cash into shareholder value and one best left off your watchlist.
One stock to sell:
Tractor Supply (TSCO)
Trailing 12-Month Free Cash Flow Margin: 1.8%
Started as a mail-order tractor parts business, Tractor Supply (NASDAQ: TSCO) is a retailer of general goods such as agricultural supplies, hardware, and pet food for the rural consumer.
Why Does TSCO Fall Short?
- Annual sales growth of 2.3% over the last three years lagged behind its consumer retail peers as its large revenue base made it difficult to generate incremental demand
- Disappointing same-store sales over the past two years show customers aren’t responding well to its product selection and store experience
- Free cash flow margin dropped by 4.4 percentage points over the last year, implying the company became more capital intensive as competition picked up
Tractor Supply’s stock price of $34.75 implies a valuation ratio of 16.3x forward P/E. Dive into our free research report to see why there are better opportunities than TSCO.
Two stocks to buy:
Sea (SE)
Trailing 12-Month Free Cash Flow Margin: 18.6%
Founded in 2009 and a publicly traded company since 2017, Sea (NYSE: SE) started as a gaming platform and has since expanded to offer a variety of services such as e-commerce, digital payments, and financial services across Southeast Asia.
Why Is SE a Good Business?
- Paying Users have grown by 21.2% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Strong engagement trends coupled with 15.5% annual growth in its average revenue per user demonstrate its platform’s stickiness with die-hard customers
- Earnings growth has trumped its peers over the last three years as its EPS has compounded at 25.8% annually
At $75.75 per share, Sea trades at 3.2x forward price-to-gross profit. Is now the right time to buy? Find out in our full research report, it’s free.
Matador Resources (MTDR)
Trailing 12-Month Free Cash Flow Margin: 24.2%
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.
What Makes MTDR Stand Out?
- Annual revenue growth of 29.5% over the past ten years was outstanding, reflecting market share gains this cycle
- Highly-profitable operating model results in strong unit economics and a best-in-class gross margin of 82.3%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends
Matador Resources is trading at $56.78 per share, or 6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks we like even more
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
