3 Cash-Producing Stocks We're Skeptical Of

A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.

Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here are three cash-producing companies that don’t make the cut and some better opportunities instead.

WeightWatchers (WW)

Trailing 12-Month Free Cash Flow Margin: 2.6%

Known by many for its old cable television commercials, WeightWatchers (NASDAQ:WW) is a wellness company offering a range of products and services promoting weight loss and healthy habits.

Why Does WW Worry Us?

1. Sluggish trends in its members suggest customers aren’t adopting its solutions as quickly as the company hoped
2. Low free cash flow margin of -0.8% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Waning returns on capital imply its previous profit engines are losing steam

At $28.47 per share, WeightWatchers trades at 21.4x forward P/E. Check out our free in-depth research report to learn more about why WW doesn’t pass our bar.

MasTec (MTZ)

Trailing 12-Month Free Cash Flow Margin: 3%

Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

Why Is MTZ Not Exciting?

1. Gross margin of 12.9% is below its competitors, leaving less money to invest in areas like marketing and R&D
2. Operating margin of 3.1% decreased from an already low base, demonstrating the tradeoff between growth and profitability
3. Free cash flow margin dropped by 4.2 percentage points over the last five years, implying the company became more capital intensive as competition picked up

MasTec’s stock price of $189.13 implies a valuation ratio of 26x forward P/E. Dive into our free research report to see why there are better opportunities than MTZ.

Stocks We Like More

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in 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 Kadant (+351% five-year return). Find your next big winner with StockStory today for free.

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