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. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one best left off your watchlist.
One Stock to Sell:
EverQuote (EVER)
Trailing 12-Month Free Cash Flow Margin: 13%
Aiming to simplify a once complicated process, EverQuote (NASDAQ: EVER) is an online insurance marketplace where consumers can compare and purchase various types of insurance from different providers
Why Does EVER Give Us Pause?
- Excessive marketing spend signals little organic demand and traction for its platform
EverQuote’s stock price of $26.14 implies a valuation ratio of 8x forward EV/EBITDA. To fully understand why you should be careful with EVER, check out our full research report (it’s free).
Two Stocks to Watch:
Lennox (LII)
Trailing 12-Month Free Cash Flow Margin: 10%
Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.
Why Do We Like LII?
- Excellent operating margin of 17.2% highlights the efficiency of its business model, and it turbocharged its profits by achieving some fixed cost leverage
- Performance over the past two years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $532.75 per share, Lennox trades at 22.6x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Tenet Healthcare (THC)
Trailing 12-Month Free Cash Flow Margin: 7.2%
With a network spanning nine states and serving primarily urban and suburban communities, Tenet Healthcare (NYSE: THC) operates a nationwide network of hospitals, ambulatory surgery centers, and outpatient facilities providing acute care and specialty healthcare services.
Why Are We Positive On THC?
- Performance over the past five years was turbocharged by share buybacks, which enabled its earnings per share to grow faster than its revenue
- Industry-leading 22.1% return on capital demonstrates management’s skill in finding high-return investments, and its rising returns show it’s making even more lucrative bets
- Improving returns on capital reflect management’s ability to monetize investments
Tenet Healthcare is trading at $199.56 per share, or 12.4x 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
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
