Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Luckily for you, we built StockStory to help you separate the good from the bad. 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:
Salesforce (CRM)
Trailing 12-Month Free Cash Flow Margin: 34.2%
With its cloud-based platform named after its stock ticker symbol CRM (Customer Relationship Management), Salesforce (NYSE: CRM) provides customer relationship management software that helps businesses connect with their customers across sales, service, marketing, and commerce.
Why Does CRM Worry Us?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 10.5% underwhelmed
- Estimated sales growth of 10% for the next 12 months is soft and implies weaker demand
- Operating margin improvement of 1.1 percentage points over the last year demonstrates its ability to scale efficiently
At $205.59 per share, Salesforce trades at 3.8x forward price-to-sales. Dive into our free research report to see why there are better opportunities than CRM.
Two Stocks to Watch:
Alphabet (GOOGL)
Trailing 12-Month Free Cash Flow Margin: 11.9%
Started by Stanford students Larry Page and Sergey Brin in a Menlo Park garage, Alphabet (NASDAQ: GOOGL) is the parent company of the eponymous Google Search engine, Google Cloud Platform, and YouTube.
Why Is GOOGL a Top Pick?
- Alphabet’s dominant Google Search sits on the pantheon of the best businesses ever. This is reflected in its robust long-term revenue growth and elite operating margin.
- The company’s profit margins have become even higher over time, speaking to its scale advantages and operating efficiency not only in its core Search business but also in Google Cloud Platform and YouTube.
- Revenue growth and increasing operating margins are the key ingredients for strong EPS growth. Google has these, and when also factoring in its share repurchases, you can see why EPS has exploded over the long term.
Alphabet is trading at $340.83 per share, or 25.9x forward price-to-earnings. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Chipotle (CMG)
Trailing 12-Month Free Cash Flow Margin: 12.6%
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE: CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Why Is CMG on Our Radar?
- Rapidly increasing restaurant base reflects a desire to sell in new markets and scale quickly
- Massive revenue base of $12.42 billion makes it a household name that influences purchasing decisions
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are climbing as it finds even more attractive growth opportunities
Chipotle’s stock price of $35.38 implies a valuation ratio of 27.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
