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 leverage their financial strength to beat the competition and one that may struggle to keep up.
One Stock to Sell:
Tenable (TENB)
Trailing 12-Month Free Cash Flow Margin: 24.7%
Starting with the widely-used Nessus vulnerability scanner first released in 1998, Tenable (NASDAQ: TENB) provides exposure management solutions that help organizations identify, assess, and prioritize cybersecurity vulnerabilities across their IT infrastructure and cloud environments.
Why Does TENB Fall Short?
- Customers had second thoughts about committing to its platform over the last year as its average billings growth of 6.9% underwhelmed
- Estimated sales growth of 6.8% for the next 12 months implies demand will slow from its two-year trend
- Operating profits increased over the last year as the company gained some leverage on its fixed costs and became more efficient
Tenable’s stock price of $26.26 implies a valuation ratio of 3x forward price-to-sales. If you’re considering TENB for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Chipotle (CMG)
Trailing 12-Month Free Cash Flow Margin: 12.4%
Born from a desire to offer quick meals with fresh, flavorful ingredients, Chipotle (NYSE: CMG) is a fast-food chain known for its healthy, Mexican-inspired cuisine and customizable dishes.
Why Is CMG Interesting?
- Fast expansion of new restaurants to reach markets with few or no locations is justified by its same-store sales growth
- Enormous revenue base of $12.14 billion provides significant leverage in supplier negotiations
- Industry-leading 19.4% return on capital demonstrates management’s skill in finding high-return investments, and its returns are growing as it capitalizes on even better market opportunities
Chipotle is trading at $29.80 per share, or 24.5x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Genpact (G)
Trailing 12-Month Free Cash Flow Margin: 12.6%
Originally spun off from General Electric in 2005 to provide business process services, Genpact (NYSE: G) is a global professional services firm that helps businesses transform their operations through digital technology, AI, and data analytics solutions.
Why Could G Be a Winner?
- Share repurchases have increased shareholder returns as its annual earnings per share growth of 11.8% exceeded its revenue gains over the last five years
- G is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its recently improved profitability means it has even more resources to invest or distribute
- Stellar returns on capital showcase management’s ability to surface highly profitable business ventures, and its returns are growing as it capitalizes on even better market opportunities
At $32.60 per share, Genpact trades at 7.8x forward P/E. Is now the time to initiate a position? 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.
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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 Kadant (+351% five-year return). Find your next big winner with StockStory today.
