Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here are two cash-producing companies that excel at turning cash into shareholder value and one best left off your watchlist.
One Stock to Sell:
Bristol-Myers Squibb (BMY)
Trailing 12-Month Free Cash Flow Margin: 24.6%
With roots dating back to 1887 and a transformative merger in 1989 that gave the company its current name, Bristol-Myers Squibb (NYSE: BMY) discovers, develops, and markets prescription medications for serious diseases including cancer, blood disorders, immunological conditions, and cardiovascular diseases.
Why Are We Wary of BMY?
- The company has faced growth challenges as its 2.6% annual revenue increases over the last five years fell short of other healthcare companies
- Estimated sales decline of 5.5% for the next 12 months implies a challenging demand environment
- Day-to-day expenses have swelled relative to revenue over the last five years as its adjusted operating margin fell by 10.4 percentage points
Bristol-Myers Squibb’s stock price of $57.99 implies a valuation ratio of 9.2x forward P/E. Read our free research report to see why you should think twice about including BMY in your portfolio.
Two Stocks to Watch:
MSA Safety (MSA)
Trailing 12-Month Free Cash Flow Margin: 16.1%
Founded in 1914 as Mine Safety Appliances to protect coal miners from dangerous gases, MSA Safety (NYSE: MSA) designs and manufactures advanced safety products that protect workers and facilities across industries including fire service, energy, construction, and manufacturing.
Why Does MSA Stand Out?
- Share buybacks catapulted its annual earnings per share growth to 14.1%, which outperformed its revenue gains over the last five years
- Free cash flow margin jumped by 6.6 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
- Returns on capital are growing as management capitalizes on its market opportunities
At $171.47 per share, MSA Safety trades at 18.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Limbach (LMB)
Trailing 12-Month Free Cash Flow Margin: 5.2%
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
What Makes LMB Stand Out?
- Market share has increased this cycle as its 12.6% annual revenue growth over the last two years was exceptional
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 29.1% outpaced its revenue gains
- Free cash flow margin expanded by 7.3 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
Limbach is trading at $76.00 per share, or 17.3x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
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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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
