A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Luckily for you, we built StockStory to help you separate the good from the bad. That said, 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:
ZoomInfo (GTM)
Trailing 12-Month Free Cash Flow Margin: 36.4%
Operating a platform it calls "RevOS" - short for Revenue Operating System - ZoomInfo (NASDAQ: GTM) provides sales, marketing, and recruiting teams with business intelligence and analytics to identify prospects and deliver targeted outreach.
Why Do We Steer Clear of GTM?
- Flat billings over the last year suggest it may need to improve its products, pricing, or go-to-market strategy to reinvigorate demand
- Sales are projected to tank by 6.2% over the next 12 months as demand evaporates
- Efficiency has decreased over the last year as its operating margin fell by 49.7 percentage points
ZoomInfo is trading at $4.09 per share, or 1.1x forward price-to-sales. If you’re considering GTM for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Caterpillar (CAT)
Trailing 12-Month Free Cash Flow Margin: 14.2%
With its iconic yellow machinery working on construction sites, Caterpillar (NYSE: CAT) manufactures construction equipment like bulldozers, excavators, and parts and maintenance services.
Why Is CAT on Our Radar?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 10.2% annual sales growth over the last five years
- Share buybacks catapulted its annual earnings per share growth to 21.7%, which outperformed its revenue gains over the last five years
- Free cash flow margin increased by 6.6 percentage points over the last five years, giving the company more capital to invest or return to shareholders
At $858.51 per share, Caterpillar trades at 29.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Garrett Motion (GTX)
Trailing 12-Month Free Cash Flow Margin: 11.1%
A key player in the transition to cleaner vehicles, Garrett Motion (NYSE: GTX) designs and manufactures turbochargers, air compressors, and electric motor technologies for vehicle manufacturers and industrial applications.
Why Do We Like GTX?
- Earnings growth has trumped its peers over the last two years as its EPS has compounded at 44.4% annually
- Free cash flow margin grew by 6.8 percentage points over the last five years, giving the company more chips to play with
- Returns on capital are growing as management capitalizes on its market opportunities
Garrett Motion’s stock price of $29.01 implies a valuation ratio of 9.4x forward EV-to-EBITDA. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
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-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
