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.

Luckily for you, we built StockStory to help you separate the good from the bad. Keeping that in mind, here are two cash-producing companies that leverage their financial strength to beat the competition and one that may face some trouble.

Trailing 12-Month Free Cash Flow Margin: 10%

Originally founded as a Wisconsin paper mill in 1872, Kimberly-Clark (NYSE:KMB) is now a household products powerhouse known for personal care and tissue products.

Why Are We Wary of KMB?

Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth

Anticipated sales growth of 2.1% for the next year implies demand will be shaky

Capital intensity has ramped up over the last year as its free cash flow margin decreased by 5 percentage points

Kimberly-Clark is trading at $98.78 per share, or 13x forward P/E. Read our free research report to see why you should think twice about including KMB in your portfolio, it’s free.

Trailing 12-Month Free Cash Flow Margin: 30.2%

Founded in 1980 by David Lam, the man who pioneered semiconductor etching technology, Lam Research (NASDAQ:LRCX) is one of the leading providers of wafer fabrication equipment used to make semiconductors.

Why Is LRCX a Good Business?

Annual revenue growth of 19.8% over the last two years was superb and indicates its market share increased during this cycle

Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its improved cash conversion implies it’s becoming a less capital-intensive business

Stellar returns on capital showcase management’s ability to surface highly profitable business ventures

At $235.41 per share, Lam Research trades at 36.7x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.

Trailing 12-Month Free Cash Flow Margin: 11.4%

Formed through the merger of 12 companies, Comfort Systems (NYSE:FIX) provides mechanical and electrical contracting services.

Why Should You Buy FIX?

Demand is greater than supply as the company’s 47.6% average backlog growth over the past two years shows it’s securing new contracts and accumulating more orders than it can fulfill

Free cash flow margin increased by 6.1 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Returns on capital are climbing as management makes more lucrative bets

Comfort Systems’s stock price of $1,450 implies a valuation ratio of 38.7x forward P/E. Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren't just high-quality businesses. Something is happening with them right now. Elite fundamentals meeting near-term momentum — both boxes checked at the same time.

Find out which stocks our AI platform is flagging this week. See this week's Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.

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-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.