2 Cash-Producing Stocks to Own for Decades and 1 That Underwhelm
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 reinvest wisely to drive long-term success and one best left off your watchlist.
One Stock to Sell:
Boise Cascade (BCC)
Trailing 12-Month Free Cash Flow Margin: 1.6%
Formed through the merger of two lumber companies, Boise Cascade Company (NYSE:BCC) manufactures and distributes wood products and other building materials.
Why Should You Sell BCC?
- Sales tumbled by 2.5% annually over the last five years, showing market trends are working against it during this cycle
- Free cash flow margin dropped by 6.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Shrinking returns on capital suggest that increasing competition is eating into the company’s profitability
Boise Cascade’s stock price of $75.55 implies a valuation ratio of 17x forward P/E. Dive into our free research report to see why there are better opportunities than BCC.
Two Stocks to Buy:
Shopify (SHOP)
Trailing 12-Month Free Cash Flow Margin: 17.7%
Starting with just three people selling snowboards online in 2004, Shopify (NASDAQ:SHOP) provides a comprehensive platform that enables merchants of all sizes to create, manage and grow their businesses across multiple sales channels.
What Makes SHOP Stand Out?
- Billings growth has averaged 33.1% over the last year, indicating a healthy pipeline of new contracts that should drive future revenue increases
- Market share will likely rise over the next 12 months as its expected revenue growth of 28.3% is robust
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
At $128.70 per share, Shopify trades at 9.9x forward price-to-sales. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.
Fair Isaac Corporation (FICO)
Trailing 12-Month Free Cash Flow Margin: 40.1%
Creator of the three-digit number that can determine whether you get a mortgage or credit card, Fair Isaac Corporation (NYSE:FICO) develops analytics software and the widely used FICO Score, which is the standard measure of consumer credit risk in the United States.
Why Will FICO Beat the Market?
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Strong free cash flow margin of 35.8% enables it to reinvest or return capital consistently, and its recently improved profitability means it has even more resources to invest or distribute
- Rising returns on capital show management is finding more attractive investment opportunities
Fair Isaac Corporation is trading at $968.63 per share, or 19.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum 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 Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.