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 face some trouble.
One Stock to Sell:
Boyd Gaming (BYD)
Trailing 12-Month Free Cash Flow Margin: 9.5%
Run by the Boyd family, Boyd Gaming (NYSE: BYD) is a diversified operator of gaming entertainment properties across the United States, offering casino games, hotel accommodations, and dining.
Why Should You Sell BYD?
- Muted 13.4% annual revenue growth over the last five years shows its demand lagged behind its consumer discretionary peers
- Capital intensity will likely increase as its free cash flow margin is anticipated to drop by 2.6 percentage points over the next year
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Boyd Gaming is trading at $82.10 per share, or 11x forward P/E. Check out our free in-depth research report to learn more about why BYD doesn’t pass our bar.
Two Stocks to Watch:
Casella Waste Systems (CWST)
Trailing 12-Month Free Cash Flow Margin: 9.8%
Starting with the founder picking up garbage with a pickup truck he purchased using savings from high school, Casella (NASDAQ: CWST) offers waste management services for businesses, residents, and the government.
Why Does CWST Catch Our Eye?
- Annual revenue growth of 20.5% over the last two years was superb and indicates its market share increased during this cycle
- Earnings per share grew by 16.2% annually over the last two years, massively outpacing its peers
- CWST is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
At $88.07 per share, Casella Waste Systems trades at 66.2x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
ADP (ADP)
Trailing 12-Month Free Cash Flow Margin: 21.5%
Processing one out of every six paychecks in the United States, ADP (NASDAQ: ADP) provides cloud-based human capital management solutions that help businesses manage payroll, benefits, talent acquisition, and HR administration.
Why Are We Bullish on ADP?
- Annual revenue growth of 7.8% over the last five years beat the sector average and underscores the unique value of its offerings
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its rising cash conversion increases its margin of safety
- Rising returns on capital show management is finding more attractive investment opportunities
ADP’s stock price of $208.56 implies a valuation ratio of 18x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
