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 that may struggle to keep up.

One Stock to Sell:

YETI (YETI)

Trailing 12-Month Free Cash Flow Margin: 13.6%

Founded by two brothers from Texas, YETI (NYSE: YETI) specializes in durable outdoor goods including coolers, drinkware, and other gear tailored to adventure enthusiasts.

Why Do We Avoid YETI?

1. Lackluster 10.3% annual revenue growth over the last five years indicates the company is losing ground to competitors
2. Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.2 percentage points over the next year
3. Eroding returns on capital from an already low base indicate that management’s recent investments are destroying value

YETI is trading at $48.94 per share, or 16.4x forward P/E. Check out our free in-depth research report to learn more about why YETI doesn’t pass our bar.

Two Stocks to Buy:

Visa (V)

Trailing 12-Month Free Cash Flow Margin: 47.2%

Processing over 829 million transactions daily and connecting billions of cards to 150 million merchant locations worldwide, Visa (NYSE: V) operates one of the world's largest electronic payments networks, facilitating secure money movement across more than 200 countries through its VisaNet processing platform.

Why Are We Bullish on V?

1. 14.5% annual revenue growth over the last five years surpassed the sector average as its products resonated with customers
2. Share repurchases over the last five years enabled its annual earnings per share growth of 18.8% to outpace its revenue gains
3. Market-beating return on equity illustrates that management has a knack for investing in profitable ventures

Visa’s stock price of $365.83 implies a valuation ratio of 25.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Shift4 (FOUR)

Trailing 12-Month Free Cash Flow Margin: 9.4%

Starting as a payment gateway provider in 1999 and now processing over $200 billion in annual payment volume, Shift4 Payments (NYSE: FOUR) provides integrated payment processing solutions and software that help businesses accept and manage transactions across in-store, online, and mobile channels.

Why Will FOUR Outperform?

1. Annual revenue growth of 27.8% over the last two years was superb and indicates its market share increased during this cycle
2. Additional sales over the last two years increased its profitability as the 34.1% annual growth in its earnings per share outpaced its revenue
3. ROE punches in at 16%, illustrating management’s expertise in identifying profitable investments

At $52.80 per share, Shift4 trades at 9.2x forward P/E. Is now a good time to buy? See for yourself in our full 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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.