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. That said, here are three cash-producing companies that don’t make the cut and some better opportunities instead.
PVH (PVH)
Trailing 12-Month Free Cash Flow Margin: 5%
Founded in 1881 by a husband and wife duo, PVH (NYSE:PVH) is a global fashion conglomerate with iconic brands like Calvin Klein and Tommy Hilfiger.
Why Are We Out on PVH?
- Underwhelming constant currency revenue performance over the past two years suggests its product offering at current prices doesn’t resonate with customers
- Low free cash flow margin of 6.6% for the last two years gives it little breathing room, constraining its ability to self-fund growth or return capital to shareholders
- Waning returns on capital from an already weak starting point displays the inefficacy of management’s past and current investment decisions
PVH’s stock price of $62.31 implies a valuation ratio of 5.3x forward P/E. Check out our free in-depth research report to learn more about why PVH doesn’t pass our bar.
Scorpio Tankers (STNG)
Trailing 12-Month Free Cash Flow Margin: 39.4%
Operating one of the youngest fleets in the industry, Scorpio Tankers (NYSE: STNG) is an international provider of marine transportation services, specializing in the shipment of refined petroleum.
Why Is STNG Not Exciting?
- Sluggish trends in its total vessels suggest customers aren’t adopting its solutions as quickly as the company hoped
- Demand will likely be soft over the next 12 months as Wall Street’s estimates imply tepid growth of 3.3%
- Falling earnings per share over the last two years has some investors worried as stock prices ultimately follow EPS over the long term
At $63.63 per share, Scorpio Tankers trades at 10.7x forward P/E. If you’re considering STNG for your portfolio, see our FREE research report to learn more.
Amneal (AMRX)
Trailing 12-Month Free Cash Flow Margin: 9%
Founded in 2002 and growing into one of America's largest generic drug producers, Amneal Pharmaceuticals (NASDAQ:AMRX) develops, manufactures, and distributes generic medicines, specialty branded drugs, biosimilars, and injectable products for the U.S. healthcare market.
Why Do We Think Twice About AMRX?
- Free cash flow margin dropped by 1.9 percentage points over the last five years, implying the company became more capital intensive as competition picked up
- Underwhelming 4.1% return on capital reflects management’s difficulties in finding profitable growth opportunities
Amneal is trading at $13.68 per share, or 16.7x forward P/E. Dive into our free research report to see why there are better opportunities than AMRX.
Stocks We Like More
Check out the high-quality names we’ve flagged in our Top 5 Growth Stocks for this month. 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.