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. That said, 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:
Biogen (BIIB)
Trailing 12-Month Free Cash Flow Margin: 19.8%
Founded in 1978 and pioneering treatments for some of medicine's most complex challenges, Biogen (NASDAQ:BIIB) develops and markets therapies for neurological conditions, including multiple sclerosis, Alzheimer's disease, spinal muscular atrophy, and rare diseases.
Why Are We Wary of BIIB?
- Annual sales declines of 7.2% for the past five years show its products and services struggled to connect with the market during this cycle
- Sales are projected to tank by 7% over the next 12 months as demand evaporates further
- Sales were less profitable over the last five years as its earnings per share fell by 15.2% annually, worse than its revenue declines
Biogen’s stock price of $138.75 implies a valuation ratio of 9.1x forward P/E. Dive into our free research report to see why there are better opportunities than BIIB.
Two Stocks to Watch:
KBR (KBR)
Trailing 12-Month Free Cash Flow Margin: 5.6%
Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.
Why Could KBR Be a Winner?
- 9.9% annual revenue growth over the last two years surpassed the sector average as its offerings resonated with customers
- Operating margin expanded by 6.3 percentage points over the last five years as it scaled and became more efficient
- Share repurchases over the last five years enabled its annual earnings per share growth of 16.6% to outpace its revenue gains
KBR is trading at $49.56 per share, or 13x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Travelers (TRV)
Trailing 12-Month Free Cash Flow Margin: 20.1%
Tracing its roots back to 1853 when it insured travelers against accidents on steamboats and railroads, Travelers (NYSE:TRV) provides a wide range of commercial and personal property and casualty insurance products to businesses, government units, associations, and individuals.
Why Does TRV Stand Out?
- Net premiums earned expanded by 10.3% annually over the last two years, outperforming the sector average and highlighting the appeal of its insurance products
- Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 52.8% outpaced its revenue gains
- Projected book value per share growth of 24.2% for the next 12 months is above its two-year trend, pointing to accelerating profitability
At $268.87 per share, Travelers trades at 2x forward P/B. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.
Don’t let fear keep you from great opportunities and take a look at Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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