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. That said, here is one cash-producing company that reinvests wisely to drive long-term success and two best left off your watchlist.
Two Stocks to Sell:
BD (BDX)
Trailing 12-Month Free Cash Flow Margin: 11.9%
With a history dating back to 1897 and a presence in virtually every hospital around the globe, Becton Dickinson (NYSE: BDX) develops and manufactures medical supplies, devices, laboratory equipment and diagnostic products used by healthcare institutions and professionals worldwide.
Why Do We Think Twice About BDX?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 5.5% over the last five years was below our standards for the healthcare sector
- Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 10.1 percentage points
- ROIC of 4.5% reflects management’s challenges in identifying attractive investment opportunities
BD is trading at $186.53 per share, or 12.9x forward P/E. Read our free research report to see why you should think twice about including BDX in your portfolio.
Nasdaq (NDAQ)
Trailing 12-Month Free Cash Flow Margin: 41.3%
Originally founded in 1971 as the world's first electronic stock market, Nasdaq (NASDAQ: NDAQ) operates global exchanges and provides technology, data, and corporate services that help companies, investors, and financial institutions navigate capital markets.
Why Are We Cautious About NDAQ?
- Performance over the past two years shows its incremental sales were less profitable, as its 9.2% annual earnings per share growth trailed its revenue gains
At $88.93 per share, Nasdaq trades at 24.2x forward P/E. If you’re considering NDAQ for your portfolio, see our FREE research report to learn more.
One Stock to Buy:
Nvidia (NVDA)
Trailing 12-Month Free Cash Flow Margin: 43.6%
Founded in 1993 by Jensen Huang and two former Sun Microsystems engineers, Nvidia (NASDAQ: NVDA) is a leading fabless designer of chips used in gaming, PCs, data centers, automotive, and a variety of end markets.
Why Will NVDA Beat the Market?
- Annual revenue growth of 125% over the last two years was superb and indicates its market share increased during this cycle
- Share repurchases over the last five years enabled its annual earnings per share growth of 79.5% to outpace its revenue gains
- Robust free cash flow margin of 45.4% gives it many options for capital deployment, and its recently improved profitability means it has even more resources to invest or distribute
Nvidia’s stock price of $182.35 implies a valuation ratio of 31.9x 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.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, 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 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as ServiceNow (+178% between March 2020 and March 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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