Businesses with strong free cash flow tend to be more adaptable and resilient. Some of these companies shine bright by using their cash wisely to strengthen their market positions.

Identifying the most effective companies isn’t easy, and that’s why we started StockStory. That said, here are three cash-producing companies that excel at turning cash into shareholder value.

ServiceNow (NOW)

Trailing 12-month free cash flow margin: 33.4%

Built on a single code base that processes more than 80 billion workflows and 6.5 trillion transactions annually, ServiceNow (NYSE:NOW) provides a cloud-based platform that helps organizations automate and digitize workflows across departments, from IT and HR to customer service and security.

Why Will NOW Beat the Market?

1. Average billings growth of 22.2% over the last year enhances its liquidity and shows there is steady demand for its products
2. Well-designed software integrates seamlessly with other workflows, enabling swift payback periods on marketing expenses and customer growth at scale
3. Strong free cash flow margin of 33.4% enables it to reinvest or return capital consistently

ServiceNow’s stock price of $105.38 implies a valuation ratio of 6.2x forward price-to-sales. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

HEICO (HEI)

Trailing 12-month free cash flow margin: 19.9%

Founded in 1957, HEICO (NYSE:HEI) manufactures and services aerospace and electronic components for commercial aviation, defense, space, and other industries.

Why Is HEI a Good Business?

1. Annual revenue growth of 17% over the past two years was outstanding, reflecting market share gains this cycle
2. Earnings growth has massively outpaced its peers over the last two years as its EPS has compounded at 32.8% annually
3. HEI is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders

At $321.52 per share, HEICO trades at 46.7x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

Sanmina (SANM)

Trailing 12-month free cash flow margin: 4.7%

Founded in 1980, Sanmina (NASDAQ:SANM) is an electronics manufacturing services company offering end-to-end solutions for various industries.

What Makes SANM Stand Out?

1. Annual revenue growth of 29.6% over the past two years was outstanding, reflecting market share gains this cycle
2. Revenue outlook for the upcoming 12 months is outstanding and shows it’s on track to gain market share
3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 41.3% exceeded its revenue gains over the last two years

Sanmina is trading at $165.57 per share, or 13.7x forward P/E. Is now the time to initiate a position? See for yourself in our in-depth research report, it’s free.

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