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.
Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here are three cash-producing companies that don’t make the cut and some better opportunities instead.
Belden (BDC)
Trailing 12-Month Free Cash Flow Margin: 8.1%
With its enamel-coated copper wire used in WWI for the Allied forces, Belden (NYSE: BDC) designs, manufactures, and sells electronic components to various industries.
Why Does BDC Give Us Pause?
- Annual revenue growth of 4% over the last two years was below our standards for the industrials sector
- Earnings growth underperformed the sector average over the last two years as its EPS grew by just 5.1% annually
- Eroding returns on capital suggest its historical profit centers are aging
Belden is trading at $148.50 per share, or 18.8x forward P/E. Check out our free in-depth research report to learn more about why BDC doesn’t pass our bar.
3M (MMM)
Trailing 12-Month Free Cash Flow Margin: 18%
Producers of the first asthma inhaler, 3M Company (NYSE: MMM) is a global conglomerate known for products in industries like healthcare, safety, electronics, and consumer goods.
Why Do We Avoid MMM?
- Organic revenue growth fell short of our benchmarks over the past two years and implies it may need to improve its products, pricing, or go-to-market strategy
- Anticipated sales growth of 3.7% for the next year implies demand will be shaky
- Earnings per share have contracted by 1.6% annually over the last five years, a headwind for returns as stock prices often echo long-term EPS performance
At $165.48 per share, 3M trades at 19.3x forward P/E. To fully understand why you should be careful with MMM, check out our full research report (it’s free).
Intercontinental Exchange (ICE)
Trailing 12-Month Free Cash Flow Margin: 39.7%
Starting as an energy trading platform in 2000 before acquiring the iconic New York Stock Exchange in 2013, Intercontinental Exchange (NYSE: ICE) operates global financial exchanges, clearing houses, and provides data services and mortgage technology solutions to financial institutions and corporations.
Why Is ICE Not Exciting?
- Annual earnings per share growth of 9% underperformed its revenue over the last five years, showing its incremental sales were less profitable
Intercontinental Exchange’s stock price of $162.03 implies a valuation ratio of 21x forward P/E. Read our free research report to see why you should think twice about including ICE in your portfolio.
Stocks We Like More
The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 6 Stocks for this week. 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 Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
