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:
MSCI (MSCI)
Trailing 12-Month Free Cash Flow Margin: 45.4%
Originally known as Morgan Stanley Capital International before becoming independent in 2007, MSCI (NYSE: MSCI) provides critical decision support tools, indexes, and analytics that help global investors understand risk and return factors and build more effective investment portfolios.
Why Are We Hesitant About MSCI?
- Push for growth has led to negative returns on capital, signaling value destruction
At $579.35 per share, MSCI trades at 30.2x forward P/E. Read our free research report to see why you should think twice about including MSCI in your portfolio.
Two Stocks to Watch:
Uber (UBER)
Trailing 12-Month Free Cash Flow Margin: 17.5%
Notoriously funded with $7.7 billion from the Softbank Vision Fund, Uber (NYSE: UBER) operates a platform of on-demand services such as ride-hailing, food delivery, and freight.
Why Should UBER Be on Your Watchlist?
- Monthly Active Platform Consumers have grown by 14.7% annually, allowing for more profitable cross-selling opportunities if it can build complementary products and features
- Incremental sales over the last three years have been highly profitable as its earnings per share increased by 212% annually, topping its revenue gains
- Free cash flow margin increased by 15.7 percentage points over the last few years, giving the company more capital to invest or return to shareholders
Uber is trading at $80.72 per share, or 17.3x forward EV/EBITDA. Is now the right time to buy? Find out in our full research report, it’s free for active Edge members.
Eli Lilly (LLY)
Trailing 12-Month Free Cash Flow Margin: 15.6%
Founded in 1876 by a Civil War veteran and pharmacist frustrated with the poor quality of medicines, Eli Lilly (NYSE: LLY) discovers, develops, and manufactures pharmaceutical products for conditions including diabetes, obesity, cancer, immunological disorders, and neurological diseases.
Why Are We Bullish on LLY?
- Impressive 36.1% annual revenue growth over the last two years indicates it’s winning market share this cycle
- Adjusted operating margin expanded by 20.8 percentage points over the last two years as it scaled and became more efficient
- Share buybacks catapulted its annual earnings per share growth to 29.5%, which outperformed its revenue gains over the last five years
Eli Lilly’s stock price of $1,041 implies a valuation ratio of 34.5x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free for active Edge members .
Stocks We Like Even More
If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.
Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).
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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today.
