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.
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 struggle to keep up.
One Stock to Sell:
Phibro Animal Health (PAHC)
Trailing 12-Month Free Cash Flow Margin: 2.4%
With a portfolio of approximately 800 product lines serving farmers and veterinarians in 90 countries, Phibro Animal Health (NASDAQ: PAHC) develops, manufactures, and markets health products for livestock and companion animals, including antibacterials, vaccines, nutritional supplements, and mineral additives.
Why Do We Think Twice About PAHC?
- Smaller revenue base of $1.4 billion means it hasn’t achieved the economies of scale that some industry juggernauts enjoy
- Ability to fund investments or reward shareholders with increased buybacks or dividends is restricted by its weak free cash flow margin of 1.2% for the last five years
At $41.07 per share, Phibro Animal Health trades at 14.2x forward P/E. If you’re considering PAHC for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Intuit (INTU)
Trailing 12-Month Free Cash Flow Margin: 32.7%
Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ: INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.
Why Are We Fans of INTU?
- Billings have averaged 17.8% growth over the last year, showing it’s securing new contracts that could potentially increase in value over time
- Highly efficient business model is illustrated by its impressive 26.7% operating margin, and it turbocharged its profits by achieving some fixed cost leverage
- INTU is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Intuit is trading at $545.21 per share, or 7.1x forward price-to-sales. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
BrightSpring Health Services (BTSG)
Trailing 12-Month Free Cash Flow Margin: 2.2%
Founded in 1974, BrightSpring Health Services (NASDAQ: BTSG) offers home health care, hospice, neuro-rehabilitation, and pharmacy services.
Why Should BTSG Be on Your Watchlist?
- Annual revenue growth of 21.4% over the last two years was superb and indicates its market share increased during this cycle
- $12.41 billion in revenue gives its scale, which leads to bargaining power with customers because there are few trusted alternatives
- Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory
BrightSpring Health Services’s stock price of $38.62 implies a valuation ratio of 32.1x 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
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out 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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
