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.
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 face some trouble.
One Stock to Sell:
Kimberly-Clark (KMB)
Trailing 12-Month Free Cash Flow Margin: 10.2%
Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE: KMB) is now a household products powerhouse known for personal care and tissue products.
Why Does KMB Fall Short?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 2.1%
- Free cash flow margin dropped by 6.3 percentage points over the last year, implying the company became more capital intensive as competition picked up
Kimberly-Clark is trading at $103.20 per share, or 13.4x forward P/E. Read our free research report to see why you should think twice about including KMB in your portfolio.
Two Stocks to Watch:
Flowserve (FLS)
Trailing 12-Month Free Cash Flow Margin: 13.4%
Manufacturing the largest pump ever built for nuclear power generation, Flowserve (NYSE: FLS) manufactures and sells flow control equipment for various industries.
Why Do We Like FLS?
- Operating margin improvement of 2.5 percentage points over the last five years demonstrates its ability to scale efficiently
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 23.6% outpaced its revenue gains
- Free cash flow margin increased by 5 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Flowserve’s stock price of $71.53 implies a valuation ratio of 19x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free for active Edge members.
Cintas (CTAS)
Trailing 12-Month Free Cash Flow Margin: 16.1%
Starting as a family business collecting and cleaning shop rags in Cincinnati, Cintas (NASDAQ: CTAS) provides corporate identity uniforms, facility services, and safety products to over one million businesses across North America.
Why Are We Backing CTAS?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 8.5% annual sales growth over the last five years
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Robust free cash flow margin of 16.2% gives it many options for capital deployment
At $187.48 per share, Cintas trades at 38x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
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 5 Strong Momentum 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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