1 Cash-Producing Stock to Own for Decades and 2 We Ignore
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. Keeping that in mind, here is one cash-producing company that leverages its financial strength to beat its competitors and two best left off your watchlist.
Two Stocks to Sell:
Reynolds (REYN)
Trailing 12-Month Free Cash Flow Margin: 8.5%
Best known for its aluminum foil, Reynolds (NASDAQ:REYN) is a household products company whose products focus on food storage, cooking, and waste.
Why Should You Sell REYN?
- Falling unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Demand will likely be weak over the next 12 months as Wall Street expects flat revenue
- Gross margin of 25.5% is below its competitors, leaving less money to invest in areas like marketing and production facilities
Reynolds is trading at $21.10 per share, or 13.6x forward P/E. If you’re considering REYN for your portfolio, see our FREE research report to learn more.
Warner Bros. Discovery (WBD)
Trailing 12-Month Free Cash Flow Margin: 8.3%
Formed from the merger of WarnerMedia and Discovery, Warner Bros. Discovery (NASDAQ:WBD) is a multinational media and entertainment company, offering television networks, streaming services, and film and television production.
Why Are We Out on WBD?
- Products and services aren't resonating with the market as its revenue declined by 5% annually over the last two years
- Free cash flow margin is forecasted to grow by 1.5 percentage points in the coming year, potentially giving the company more chips to play with
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
Warner Bros. Discovery’s stock price of $27.35 implies a valuation ratio of 11.2x forward EV-to-EBITDA. To fully understand why you should be careful with WBD, check out our full research report (it’s free).
One Stock to Buy:
Curtiss-Wright (CW)
Trailing 12-Month Free Cash Flow Margin: 15.8%
Formed from a merger of 12 companies, Curtiss-Wright (NYSE:CW) provides a range of products and services to the aerospace, industrial, electronic, and maritime industries.
Why Do We Love CW?
- Annual revenue growth of 10.9% over the past two years was outstanding, reflecting market share gains this cycle
- Disciplined cost controls and effective management resulted in a strong long-term operating margin of 16.9%, and it turbocharged its profits by achieving some fixed cost leverage
- Share buybacks catapulted its annual earnings per share growth to 18.8%, which outperformed its revenue gains over the last two years
At $719.80 per share, Curtiss-Wright trades at 48.5x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
