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.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. That said, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may struggle to keep up.

One Stock to Sell:

Malibu Boats (MBUU)

Trailing 12-Month Free Cash Flow Margin: 5.8%

Founded in California in 1982, Malibu Boats (NASDAQ: MBUU) is a manufacturer of high-performance sports boats and luxury watercrafts.

Why Should You Sell MBUU?

1. Performance surrounding its boats sold has lagged its peers
2. Low free cash flow margin of 6.2% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
3. Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

At $33.60 per share, Malibu Boats trades at 25.4x forward P/E. If you’re considering MBUU for your portfolio, see our FREE research report to learn more.

Two Stocks to Watch:

Republic Services (RSG)

Trailing 12-Month Free Cash Flow Margin: 16%

Processing several million tons of recyclables annually, Republic (NYSE: RSG) provides waste management services for residences, companies, and municipalities.

Why Could RSG Be a Winner?

1. Annual revenue growth of 10.2% over the last five years beat the sector average and underscores the unique value of its offerings
2. Disciplined cost controls and effective management resulted in a strong long-term operating margin of 18.9%, and its profits increased over the last five years as it scaled
3. Robust free cash flow margin of 13.8% gives it many options for capital deployment, and its rising cash conversion increases its margin of safety

Republic Services is trading at $210.92 per share, or 29.6x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

Gorman-Rupp (GRC)

Trailing 12-Month Free Cash Flow Margin: 12.4%

Powering fluid dynamics since 1934, Gorman-Rupp (NYSE: GRC) has evolved from its Ohio origins into a global manufacturer and seller of pumps and pump systems.

Why Are We Positive On GRC?

1. Impressive 13.5% annual revenue growth over the last five years indicates it’s winning market share this cycle
2. Sales pipeline is in good shape as its backlog averaged 12.7% growth over the past two years
3. Earnings growth has trumped its peers over the last two years as its EPS has compounded at 33% annually

Gorman-Rupp’s stock price of $52.95 implies a valuation ratio of 23.8x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Stocks We Like Even More

If your portfolio success hinges on just 4 stocks, your wealth is built on fragile ground. You have a small window to secure high-quality assets before the market widens and these prices disappear.

Don’t wait for the next volatility shock. Check out our Top 9 Market-Beating Stocks. 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-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.