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 best left off your watchlist.
One Stock to Sell:
IDEX (IEX)
Trailing 12-Month Free Cash Flow Margin: 17.9%
Founded in 1988, IDEX (NYSE: IEX) is a global manufacturer specializing in highly engineered products such as pumps, flow meters, and fluidics systems for various industries.
Why Are We Cautious About IEX?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Earnings per share lagged its peers over the last two years as they only grew by 3.5% annually
- Waning returns on capital imply its previous profit engines are losing steam
IDEX is trading at $231.25 per share, or 25.2x forward P/E. Check out our free in-depth research report to learn more about why IEX doesn’t pass our bar.
Two Stocks to Watch:
Zeta Global (ZETA)
Trailing 12-Month Free Cash Flow Margin: 12.9%
Powered by an AI engine that processes over one trillion consumer signals monthly, Zeta Global (NYSE: ZETA) operates a data-driven cloud platform that helps companies target, connect, and engage with consumers through personalized marketing across channels like email, social media, and video.
Why Are We Positive on ZETA?
- Billings have averaged 38.7% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Notable projected revenue growth of 24.6% for the next 12 months hints at market share gains
- Free cash flow margin is on track to jump by 1.6 percentage points next year, meaning the company will have more resources to pursue growth initiatives, repurchase shares, or pay dividends
Zeta Global’s stock price of $28.96 implies a valuation ratio of 3.9x forward price-to-sales. Is now a good time to buy? See for yourself in our full research report, it’s free.
Trane Technologies (TT)
Trailing 12-Month Free Cash Flow Margin: 16.1%
With low-pressure heating systems as its first product, Trane (NYSE: TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
What Makes TT Stand Out?
- Annual revenue growth of 10.4% over the last five years beat the sector average and underscores the unique value of its offerings
- Share buybacks catapulted its annual earnings per share growth to 19.2%, which outperformed its revenue gains over the last five years
- Free cash flow margin grew by 9.5 percentage points over the last five years, giving the company more chips to play with
At $452.69 per share, Trane Technologies trades at 27.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
Find out which 5 stocks it’s flagging this month — FREE. Get Our Top 5 Growth 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.
