While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
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 that may face some trouble.
One Stock to Sell:
Live Nation (LYV)
Trailing 12-Month Free Cash Flow Margin: 6.6%
Owner of Ticketmaster and operator of music festival EDC, Live Nation (NYSE: LYV) is a company specializing in live event promotion, venue management, and ticketing services for concerts and shows.
Why Do We Think Twice About LYV?
- Annual sales growth of 5.3% over the last two years lagged behind its consumer discretionary peers as its large revenue base made it difficult to generate incremental demand
- Operating margin of 4.3% falls short of the industry average, and the smaller profit dollars make it harder to react to unexpected market developments
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 1.3 percentage points over the next year
Live Nation is trading at $157.83 per share, or 115.1x forward P/E. If you’re considering LYV for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Remitly (RELY)
Trailing 12-Month Free Cash Flow Margin: 18.1%
With Amazon founder Jeff Bezos as an early investor, Remitly (NASDAQ: RELY) is an online platform that enables consumers to safely and quickly send money globally.
Why Will RELY Beat the Market?
- Active Customers have grown by 29.2% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Performance over the past three years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 108% outpaced its revenue gains
- Free cash flow margin increased by 34.7 percentage points over the last few years, giving the company more capital to invest or return to shareholders
At $16.79 per share, Remitly trades at 8.9x forward EV/EBITDA. Is now the time to initiate a position? Find out in our full research report, it’s free.
Flowserve (FLS)
Trailing 12-Month Free Cash Flow Margin: 9.2%
Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE: FLS) manufactures and sells flow control equipment for various industries.
Why Are We Positive On FLS?
- Adequate gross margin of 31.2% gives it sufficient room to spend on marketing and product development
- Share repurchases over the last two years enabled its annual earnings per share growth of 29.8% to outpace its revenue gains
- Free cash flow margin expanded by 3.7 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Flowserve’s stock price of $89.41 implies a valuation ratio of 22.2x forward P/E. Is now a good time to buy? See for yourself in our full research report, it’s free.
Stocks We Like Even More
Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.
The names generating the next wave of massive growth are right here in our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
