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2 Cash-Producing Stocks with Exciting Potential and 1 We Avoid
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. That said, here are two cash-producing companies that reinvest wisely to drive long-term success and one best left off your watchlist.
One Stock to Sell:
F5 (FFIV)
Trailing 12-Month Free Cash Flow Margin: 29.3%
Originally named after the F5 tornado, the most powerful on the meteorological scale, F5 (NASDAQ:FFIV) provides security and delivery solutions that protect applications across cloud, data center, and edge environments for large organizations.
Why Do We Think Twice About FFIV?
- Average billings growth of 11.3% over the last year was subpar, suggesting it struggled to push its software and might have to lower prices to stimulate demand
- Estimated sales growth of 7.6% for the next 12 months implies demand will slow from its two-year trend
- Operating margin didn’t move over the last year, showing it couldn’t increase its efficiency
F5 is trading at $467.67 per share, or 7.6x forward price-to-sales. If you’re considering FFIV for your portfolio, see our FREE research report to learn more.
Two Stocks to Buy:
BWX (BWXT)
Trailing 12-Month Free Cash Flow Margin: 9%
Contributing components and materials to the famous Manhattan Project in the 1940s, BWX (NYSE:BWXT) is a manufacturer and service provider of nuclear components and fuel for government and commercial industries.
Why Are We Bullish on BWXT?
- Impressive 16.2% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Expected revenue growth of 14.3% for the next year suggests its market share will rise
- Free cash flow margin increased by 6.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $142.00 per share, BWX trades at 29.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Crescent Energy (CRGY)
Trailing 12-Month Free Cash Flow Margin: 19.3%
Controlling over 1.4 million net acres across proven U.S. basins, Crescent Energy (NYSE:CRGY) extracts oil and natural gas from underground reservoirs in Texas and the Rocky Mountains.
Why Do We Love CRGY?
- Impressive 36.2% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Superiority of its unit economics results in a stellar gross margin of 60.2%
- Robust free cash flow margin of 16.9% gives it many options for capital deployment
Crescent Energy’s stock price of $13.54 implies a valuation ratio of 5.3x 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
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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.