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.

Luckily for you, we built StockStory to help you separate the good from the bad. That said, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may face some trouble.

One Stock to Sell:

Agilysys (AGYS)

Trailing 12-Month Free Cash Flow Margin: 19.1%

With a tech stack that powers everything from check-in to checkout at some of the world's top hospitality venues, Agilysys (NASDAQ: AGYS) develops and provides cloud-based and on-premise software solutions for hotels, resorts, casinos, and restaurants to manage operations and enhance guest experiences.

Why Are We Wary of AGYS?

1. 17.2% annual revenue growth over the last five years was slower than its software peers
2. High servicing costs result in a relatively inferior gross margin of 61.7% that must be offset through increased usage
3. Operating margin improvement of 3.6 percentage points over the last year demonstrates its ability to scale efficiently

At $71.09 per share, Agilysys trades at 5.8x forward price-to-sales. Check out our free in-depth research report to learn more about why AGYS doesn’t pass our bar.

Two Stocks to Watch:

Altria (MO)

Trailing 12-Month Free Cash Flow Margin: 45.1%

Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.

Why Could MO Be a Winner?

1. Differentiated product offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 87.1%
2. Disciplined cost controls and effective management resulted in a strong two-year operating margin of 52.1%
3. Robust free cash flow margin of 43.6% gives it many options for capital deployment, and its improved cash conversion implies it’s becoming a less capital-intensive business

Altria is trading at $65.96 per share, or 11.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

EQT (EQT)

Trailing 12-Month Free Cash Flow Margin: 37.3%

The largest natural gas producer in the United States by daily volume, EQT (NYSE: EQT) produces natural gas and natural gas liquids from wells drilled in the Appalachian Basin.

Why Will EQT Outperform?

1. Annual revenue growth of 13.6% over the past ten years was outstanding, reflecting market share gains this cycle
2. EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
3. Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends

EQT’s stock price of $59.80 implies a valuation ratio of 12.8x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Stocks We Like Even More

WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don't just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.

But our AI platform says the party isn't over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.

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.