A company that generates cash isn’t automatically a winner. Some businesses stockpile cash but fail to reinvest wisely, limiting their ability to expand.
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:
Waste Connections (WCN)
Trailing 12-Month Free Cash Flow Margin: 13%
Operating a network of municipal solid waste landfills in the U.S. and Canada, Waste Connections (NYSE: WCN) is North America's third-largest waste management company providing collection, disposal, and recycling services.
Why Does WCN Fall Short?
- Estimated sales growth of 4.9% for the next 12 months implies demand will slow from its two-year trend
- 2.5 percentage point decline in its free cash flow margin over the last five years reflects the company’s increased investments to defend its market position
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its shrinking returns suggest its past profit sources are losing steam
Waste Connections is trading at $163.66 per share, or 30.4x forward P/E. If you’re considering WCN for your portfolio, see our FREE research report to learn more.
Two Stocks to Watch:
Thermon (THR)
Trailing 12-Month Free Cash Flow Margin: 10.5%
Creating the first packaged tracing systems, Thermon (NYSE: THR) is a leading provider of engineered industrial process heating solutions for process industries.
Why Do We Like THR?
- Annual revenue growth of 12.4% over the last five years was superb and indicates its market share increased during this cycle
- Operating margin improvement of 8.8 percentage points over the last five years demonstrates its ability to scale efficiently
- Additional sales over the last five years increased its profitability as the 46.1% annual growth in its earnings per share outpaced its revenue
Thermon’s stock price of $50.86 implies a valuation ratio of 23.3x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
The Ensign Group (ENSG)
Trailing 12-Month Free Cash Flow Margin: 7%
Founded in 1999 and named after a naval term for a flag-bearing ship, The Ensign Group (NASDAQ: ENSG) operates skilled nursing facilities, senior living communities, and rehabilitation services across 15 states, primarily serving high-acuity patients recovering from various medical conditions.
Why Should ENSG Be on Your Watchlist?
- Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
- Earnings growth has massively outpaced its peers over the last five years as its EPS has compounded at 13.8% annually
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
At $210.66 per share, The Ensign Group trades at 27.2x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
Stocks We Like Even 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 6 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).
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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
