3 Cash-Producing Stocks on Our Watchlist

Businesses with strong free cash flow tend to be more adaptable and resilient. Some of these companies shine bright by using their cash wisely to strengthen their market positions.

Identifying the most effective companies isn’t easy, and that’s why we started StockStory. Keeping that in mind, here are three cash-producing companies that reinvest wisely to drive long-term success.

Broadcom (AVGO)

Trailing 12-Month Free Cash Flow Margin: 41.6%

Originally the semiconductor division of Hewlett Packard, Broadcom (NASDAQ:AVGO) is a semiconductor conglomerate spanning wireless communications, networking, and data storage as well as infrastructure software focused on mainframes and cybersecurity.

Why Do We Love AVGO?

1. Annual revenue growth of 30% over the past two years was outstanding, reflecting market share gains this cycle
2. Superior product capabilities and pricing power result in a best-in-class gross margin of 76.1%
3. Robust free cash flow margin of 40.8% gives it many options for capital deployment

At $359.21 per share, Broadcom trades at 46.4x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

CSW (CSW)

Trailing 12-Month Free Cash Flow Margin: 16.4%

With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ:CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.

Why Will CSW Beat the Market?

1. Annual revenue growth of 19.6% over the past five years was outstanding, reflecting market share gains this cycle
2. Additional sales over the last five years increased its profitability as the 25.9% annual growth in its earnings per share outpaced its revenue
3. Strong free cash flow margin of 15.5% enables it to reinvest or return capital consistently, and its growing cash flow gives it even more resources to deploy

CSW’s stock price of $254.84 implies a valuation ratio of 25.5x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Hims & Hers Health (HIMS)

Trailing 12-Month Free Cash Flow Margin: 5.9%

Originally launched with a focus on stigmatized conditions like hair loss and sexual health, Hims & Hers Health (NYSE:HIMS) operates a consumer-focused telehealth platform that connects patients with healthcare providers for prescriptions and wellness products.

Why Should HIMS Be on Your Watchlist?

1. Business is winning new contracts that can potentially increase in value as its customer base averaged 43.3% growth over the past two years
2. Free cash flow margin jumped by 14.5 percentage points over the last five years, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
3. Historical investments are beginning to pay off as its returns on capital are growing

Hims & Hers Health is trading at $51.80 per share, or 42.3x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - 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 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-small-cap company Comfort Systems (+782% 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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