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 is one cash-producing company that excels at turning cash into shareholder value and two best left off your watchlist.
Two Stocks to Sell:
Domino's (DPZ)
Trailing 12-Month Free Cash Flow Margin: 13%
Founded by two brothers in Michigan, Domino’s (NASDAQ:DPZ) is a globally recognized pizza chain known for its creative marketing and fast delivery.
Why Are We Hesitant About DPZ?
- Lagging same-store sales over the past two years suggest it might have to change its pricing and marketing strategy to stimulate demand
- Estimated sales growth of 4.8% for the next 12 months is soft and implies weaker demand
- Free cash flow margin didn’t grow over the last year
Domino's is trading at $320.46 per share, or 15.9x forward P/E. Dive into our free research report to see why there are better opportunities than DPZ.
Saia (SAIA)
Trailing 12-Month Free Cash Flow Margin: 8.2%
Pivoting its business model after realizing there was more success in delivering produce than selling it, Saia (NASDAQ:SAIA) is a provider of freight transportation solutions.
Why Does SAIA Give Us Pause?
- Underwhelming tons shipped over the past two years indicate demand is soft and that the company may need to revise its strategy
- Earnings per share have contracted by 16.3% annually over the last two years, a headwind for returns as stock prices often echo long-term EPS performance
- Eroding returns on capital suggest its historical profit centers are aging
Saia’s stock price of $346.02 implies a valuation ratio of 27x forward P/E. Check out our free in-depth research report to learn more about why SAIA doesn’t pass our bar.
One Stock to Watch:
Kinder Morgan (KMI)
Trailing 12-Month Free Cash Flow Margin: 17.6%
Operating what amounts to the toll roads of the energy industry, Kinder Morgan (NYSE:KMI) transports natural gas, refined petroleum products, and crude oil through its pipeline network across North America.
Why Does KMI Stand Out?
- Enormous revenue base of $17.96 billion provides significant leverage in supplier negotiations
- EBITDA profits and efficiency rose over the last five years as it benefited from some fixed cost leverage
- Strong free cash flow margin of 19.9% enables it to reinvest or return capital consistently
At $31.01 per share, Kinder Morgan trades at 21.4x 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
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 (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+214% between June 2020 and June 2025). Find your next big winner with StockStory today.