While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.
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 that may face some trouble.
One Stock to Sell:
UFP Industries (UFPI)
Trailing 12-Month Free Cash Flow Margin: 4.9%
Beginning as a lumber supplier in the 1950s, UFP Industries (NASDAQ: UFPI) is a holding company making building materials for the construction, retail, and industrial sectors.
Why Should You Sell UFPI?
- Sales tumbled by 6.2% annually over the last two years, showing market trends are working against it during this cycle
- Earnings per share have contracted by 1.8% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital suggest its historical profit centers are aging
At $85.94 per share, UFP Industries trades at 18.2x forward P/E. If you’re considering UFPI for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Tutor Perini (TPC)
Trailing 12-Month Free Cash Flow Margin: 12.4%
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE: TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Why Does TPC Stand Out?
- Annual revenue growth of 17% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 102% annually over the last two years and trumped its peers
- Free cash flow margin increased by 12.9 percentage points over the last five years, giving the company more capital to invest or return to shareholders
Tutor Perini is trading at $78.61 per share, or 14.4x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Korn Ferry (KFY)
Trailing 12-Month Free Cash Flow Margin: 11%
With clients including 97% of the S&P 100 and operations in 103 offices across 51 countries, Korn Ferry (NYSE: KFY) is a global consulting firm that helps organizations design optimal structures, recruit talent, develop leaders, and create effective compensation strategies.
Why Could KFY Be a Winner?
- Impressive 10.1% annual revenue growth over the last five years indicates it’s winning market share this cycle
- Earnings per share grew by 26.9% annually over the last two years, massively outpacing its peers
- Industry-leading 19% return on capital demonstrates management’s skill in finding high-return investments
Korn Ferry’s stock price of $78.61 implies a valuation ratio of 13.6x forward P/E. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even More
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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-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
