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. 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:

Bristol-Myers Squibb (BMY)

Trailing 12-Month Free Cash Flow Margin: 27.5%

With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE: BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.

Why Do We Think Twice About BMY?

1. Scale is a double-edged sword because it limits the company’s growth potential compared to its smaller competitors, as reflected in its below-average annual revenue increases of 1.9% for the last two years
2. Forecasted revenue decline of 4.4% for the upcoming 12 months implies demand will fall off a cliff
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

Bristol-Myers Squibb is trading at $49.13 per share, or 7.4x forward P/E. To fully understand why you should be careful with BMY, check out our full research report (it’s free).

Two Stocks to Watch:

Meta (META)

Trailing 12-Month Free Cash Flow Margin: 29.3%

Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ: META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.

Why Should You Buy META?

1. Customers are spending more money on its platform as its average revenue per user has increased by 13.3% annually over the last two years
2. Excellent EBITDA margin of 59.9% highlights the efficiency of its business model, and its operating leverage amplified its profits over the last few years
3. Robust free cash flow margin of 31.5% gives it many options for capital deployment

Meta’s stock price of $716.46 implies a valuation ratio of 16.2x forward EV/EBITDA. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

Cardinal Health (CAH)

Trailing 12-Month Free Cash Flow Margin: 1.1%

Operating as a critical link in the healthcare supply chain since 1979, Cardinal Health (NYSE: CAH) distributes pharmaceuticals and manufactures medical products for hospitals, pharmacies, and healthcare providers across the global healthcare supply chain.

Why Does CAH Stand Out?

1. Massive revenue base of $222.3 billion in a highly regulated sector makes the company difficult to replace, giving it meaningful negotiating power
2. Demand will likely accelerate over the next 12 months as its forecasted revenue growth of 9.5% is above its two-year trend
3. Earnings per share grew by 7.7% annually over the last five years, above the peer group average

At $158.58 per share, Cardinal Health trades at 18.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

When Trump unveiled his aggressive tariff plan in April 2024, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today

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