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. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may face some trouble.
One Stock to Sell:
GE Vernova (GEV)
Trailing 12-Month Free Cash Flow Margin: 9.7%
Born from the energy business of industrial giant General Electric in a 2023 spin-off, GE Vernova (NYSE: GEV) designs, manufactures, and services power generation equipment and grid technologies to help customers build more reliable and sustainable electric systems.
Why Do We Think Twice About GEV?
- Annual sales growth of 3.6% over the last four years lagged behind its industrials peers as its large revenue base made it difficult to generate incremental demand
- Competitive supply chain dynamics and steep production costs are reflected in its low gross margin of 16.2%
- Historical operating margin losses point to an inefficient cost structure
At $881.49 per share, GE Vernova trades at 60.8x forward P/E. Check out our free in-depth research report to learn more about why GEV doesn’t pass our bar.
Two Stocks to Watch:
Alignment Healthcare (ALHC)
Trailing 12-Month Free Cash Flow Margin: 2.9%
Founded in 2013 with a mission to transform healthcare for seniors, Alignment Healthcare (NASDAQ: ALHC) provides Medicare Advantage health plans for seniors with features like concierge services, transportation benefits, and technology-driven care coordination.
Why Do We Love ALHC?
- Average customer growth of 25.5% over the past two years demonstrates success in acquiring new clients that could increase their spending in the future
- Earnings per share grew by 27.7% annually over the last four years, massively outpacing its peers
- Free cash flow flipped to positive over the last five years, indicating the company has achieved financial self-sustainability
Alignment Healthcare is trading at $17.84 per share, or 41.6x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Barrett (BBSI)
Trailing 12-Month Free Cash Flow Margin: 3.8%
Operating as a professional employer organization (PEO) that serves over 8,000 companies with more than 120,000 worksite employees, Barrett Business Services (NASDAQ: BBSI) provides management solutions that help small and mid-sized businesses handle human resources, payroll, workers' compensation, and other administrative functions.
Why Do We Like BBSI?
- Offerings and unique value proposition resonate with customers, as seen in its above-market 7.7% annual sales growth over the last two years
- Free cash flow margin expanded by 6.1 percentage points over the last five years, providing additional flexibility for investments and share buybacks/dividends
- Industry-leading 54.7% return on capital demonstrates management’s skill in finding high-return investments
Barrett’s stock price of $27.87 implies a valuation ratio of 15.1x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
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.
