A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
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 best left off your watchlist.
One Stock to Sell:
Regal Rexnord (RRX)
Trailing 12-Month Free Cash Flow Margin: 8.8%
Headquartered in Milwaukee, Regal Rexnord (NYSE: RRX) provides power transmission and industrial automation products.
Why Do We Think Twice About RRX?
- 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 2.6% annually
- Underwhelming 4.4% return on capital reflects management’s difficulties in finding profitable growth opportunities, and its decreasing returns suggest its historical profit centers are aging
At $203.83 per share, Regal Rexnord trades at 19.6x forward P/E. To fully understand why you should be careful with RRX, check out our full research report (it’s free).
Two Stocks to Buy:
Copart (CPRT)
Trailing 12-Month Free Cash Flow Margin: 30.5%
Starting as a single salvage yard in California in 1982, Copart (NASDAQ: CPRT) operates an online auction platform that connects sellers of damaged and salvage vehicles with buyers ranging from dismantlers and rebuilders to used car dealers and exporters.
Why Should You Buy CPRT?
- Impressive 15.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 17.5% outpaced its revenue gains
- Robust free cash flow margin of 23.9% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety
Copart is trading at $33.34 per share, or 20.9x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.
Corpay (CPAY)
Trailing 12-Month Free Cash Flow Margin: 28.7%
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE: CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
Why Are We Backing CPAY?
- Solid 13.6% annual revenue growth over the last five years indicates its offering’s solve complex business issues
- Earnings growth has topped the peer group average over the last five years as its EPS has compounded at 14% annually
- Market-beating return on equity illustrates that management has a knack for investing in profitable ventures
Corpay’s stock price of $307.17 implies a valuation ratio of 12x 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
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 (+1,326% 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.
