Generating cash is essential for any business, but not all cash-rich companies are great investments. Some produce plenty of cash but fail to allocate it effectively, leading to missed opportunities.
Not all companies are created equal, and StockStory is here to surface the ones with real upside. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two that may struggle to keep up.
Two Stocks to Sell:
Papa John's (PZZA)
Trailing 12-Month Free Cash Flow Margin: 1.7%
Founded by the eclectic John “Papa John” Schnatter, Papa John’s (NASDAQ: PZZA) is a globally recognized pizza delivery and carryout chain known for “better ingredients” and “better pizza”.
Why Do We Steer Clear of PZZA?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Projected sales decline of 5.7% for the next 12 months points to a tough demand environment ahead
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 2.6 percentage points
Papa John's is trading at $20.13 per share, or 17.2x forward P/E. If you’re considering PZZA for your portfolio, see our FREE research report to learn more.
Wolverine Worldwide (WWW)
Trailing 12-Month Free Cash Flow Margin: 9%
Founded in 1883, Wolverine Worldwide (NYSE: WWW) is a global footwear company with a diverse portfolio of brands including Merrell, Hush Puppies, and Saucony.
Why Are We Bearish on WWW?
- Products and services aren’t resonating with the market as its revenue declined by 1.9% annually over the last five years
- Falling earnings per share over the last five years has some investors worried as stock prices ultimately follow EPS over the long term
- Poor free cash flow margin of 8% for the last two years limits its freedom to invest in growth initiatives, execute share buybacks, or pay dividends
At $19.13 per share, Wolverine Worldwide trades at 10.8x forward P/E. Read our free research report to see why you should think twice about including WWW in your portfolio.
One Stock to Buy:
Corpay (CPAY)
Trailing 12-Month Free Cash Flow Margin: 32.6%
Formerly known as FLEETCOR until its 2024 rebrand, Corpay (NYSE: CPAY) provides specialized payment solutions for businesses to manage vehicle expenses, corporate payments, and lodging costs with enhanced control and reporting capabilities.
Why Do We Love CPAY?
- Market share has increased this cycle as its 15.2% annual revenue growth over the last five years was exceptional
- Share repurchases over the last two years enabled its annual earnings per share growth of 18.1% to outpace its revenue gains
- Stellar return on equity showcases management’s ability to surface highly profitable business ventures
Corpay’s stock price of $396.90 implies a valuation ratio of 13.6x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
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Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+271% between June 2020 and June 2025). Find your next big winner with StockStory today.
