A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, 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:
Workday (WDAY)
Trailing 12-Month Free Cash Flow Margin: 30.2%
Born from the vision of PeopleSoft founders after Oracle's hostile takeover of their previous company, Workday (NASDAQ: WDAY) provides cloud-based software for financial management, human resources, planning, and analytics to help organizations manage their business operations.
Why Do We Think Twice About WDAY?
- Sales trends were unexciting over the last two years as its 14.1% annual growth was below the typical software company
- Estimated sales growth of 10.9% 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
At $163.27 per share, Workday trades at 3.7x forward price-to-sales. To fully understand why you should be careful with WDAY, check out our full research report (it’s free).
Two Stocks to Buy:
Humana (HUM)
Trailing 12-Month Free Cash Flow Margin: 1.4%
With over 80% of its revenue derived from federal government contracts, Humana (NYSE: HUM) provides health insurance plans and healthcare services to approximately 17 million members, with a strong focus on Medicare Advantage plans for seniors.
Why Will HUM Beat the Market?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 15.1% annual sales growth over the last two years
- Dominant market position is represented by its $145.8 billion in revenue, which gives it negotiating power over membership pricing and reimbursement rates
- ROIC punches in at 32.9%, illustrating management’s expertise in identifying profitable investments
Humana is trading at $377.25 per share, or 29.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
HCA Healthcare (HCA)
Trailing 12-Month Free Cash Flow Margin: 7.7%
With roots dating back to 1968 and a network spanning 20 states, HCA Healthcare (NYSE: HCA) operates a network of 190 hospitals and 150+ outpatient facilities providing a full range of medical services across the US and England.
Why Do We Love HCA?
- Dominant market position is represented by its $78.01 billion in revenue, which creates significant barriers to entry in this highly regulated industry
- Share repurchases over the last five years enabled its annual earnings per share growth of 15.4% to outpace its revenue gains
- Industry-leading 28.7% return on capital demonstrates management’s skill in finding high-return investments
HCA Healthcare’s stock price of $405.50 implies a valuation ratio of 13.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
High-Quality Stocks for All Market Conditions
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI is taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662% between October 2022 and February 2026. AppLovin before it ran 753% between February 2024 and February 2026. Nvidia before it ran 1,178% between January 2023 and February 2026. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
