1 Cash-Producing Stock Worth Your Attention and 2 That Underwhelm

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 is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.

Two Stocks to Sell:

Ingersoll Rand (IR)

Trailing 12-Month Free Cash Flow Margin: 15.9%

Started with the invention of the steam drill, Ingersoll Rand (NYSE:IR) provides mission-critical air, gas, liquid, and solid flow creation solutions.

Why Does IR Fall Short?

1. Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
2. Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 4.1%
3. Underwhelming 5.9% return on capital reflects management’s difficulties in finding profitable growth opportunities

At $93.03 per share, Ingersoll Rand trades at 26.8x forward P/E. To fully understand why you should be careful with IR, check out our full research report (it’s free).

Verisk (VRSK)

Trailing 12-Month Free Cash Flow Margin: 38.8%

Processing over 2.8 billion insurance transaction records annually through one of the world's largest private databases, Verisk Analytics (NASDAQ:VRSK) provides data, analytics, and technology solutions that help insurance companies assess risk, detect fraud, and make better business decisions.

Why Is VRSK Not Exciting?

1. 2% annual revenue growth over the last five years was slower than its business services peers
2. Estimated sales growth of 4.3% for the next 12 months implies demand will slow from its two-year trend
3. Earnings growth underperformed the sector average over the last five years as its EPS grew by just 7.2% annually

Verisk’s stock price of $195.84 implies a valuation ratio of 25.1x forward P/E. Check out our free in-depth research report to learn more about why VRSK doesn’t pass our bar.

One Stock to Watch:

Colgate-Palmolive (CL)

Trailing 12-Month Free Cash Flow Margin: 17.8%

Formed after the 1928 combination between toothpaste maker Colgate and soap maker Palmolive-Peet, Colgate-Palmolive (NYSE:CL) is a consumer products company that focuses on personal, household, and pet products.

Why Could CL Be a Winner?

1. Unparalleled brand awareness is evident in its $20.38 billion revenue base, which gives it advantageous terms because retailers must stock its products
2. Unique products and pricing power are reflected in its best-in-class gross margin of 60.3%
3. Strong free cash flow margin of 17.7% enables it to reinvest or return capital consistently

Colgate-Palmolive is trading at $97.00 per share, or 25.3x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

Your portfolio can’t afford to be based on yesterday’s story. The risk in a handful of heavily crowded stocks is rising daily.

The names generating the next wave of massive growth are right here in our Top 5 Strong Momentum Stocks for this week. 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).

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