Cash-generating companies often have the flexibility to invest, return capital to shareholders, or navigate downturns. The best of these businesses not only accumulate cash but deploy it strategically for growth.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are three cash-producing companies that excel at turning cash into shareholder value.
Datadog (DDOG)
Trailing 12-Month Free Cash Flow Margin: 26.1%
Named after a database the founders had to painstakingly look after at their previous company, Datadog (NASDAQ: DDOG) provides a software platform that helps organizations monitor and secure their cloud applications, infrastructure, and services.
Why Should You Buy DDOG?
- Ability to secure long-term commitments with customers is evident in its 29.5% ARR growth over the last year
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Fast payback periods on sales and marketing expenses allow the company to invest heavily and onboard many customers concurrently
At $230.58 per share, Datadog trades at 19.5x forward price-to-sales. Is now the time to initiate a position? Find out in our full research report, it’s free.
CSW (CSW)
Trailing 12-Month Free Cash Flow Margin: 12.2%
With over two centuries of combined operations manufacturing and supplying, CSW (NYSE: CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.
Why Is CSW a Top Pick?
- Impressive 16.9% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Excellent operating margin of 18% highlights the efficiency of its business model
- Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 23.4% annually
CSW’s stock price of $266.25 implies a valuation ratio of 22.4x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
Waste Management (WM)
Trailing 12-Month Free Cash Flow Margin: 12.9%
Headquartered in Houston, Waste Management (NYSE: WM) is a provider of comprehensive waste management services in North America.
Why Do We Like WM?
- Impressive 10.8% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Offerings are difficult to replicate at scale and lead to a stellar gross margin of 39%
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 17.4%
Waste Management is trading at $220.27 per share, or 26.1x 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
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
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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.
