3 Cash-Producing Stocks We Steer Clear Of
Not all companies are created equal, and StockStory is here to surface the ones with real upside. That said, here are three cash-producing companies that don't make the cut and some better opportunities instead.
Gray Television (GTN)
Trailing 12-Month Free Cash Flow Margin: 9.5%
Specializing in local media coverage, Gray Television (NYSE:GTN) is a broadcast company supplying digital media to various markets in the United States.
Why Do We Pass on GTN?
Sales were flat over the last two years, indicating it's failed to expand its business
Projected 5.3 percentage point decline in its free cash flow margin next year reflects the company's plans to increase its investments to defend its market position
High net-debt-to-EBITDA ratio of 5× increases the risk of forced asset sales or dilutive financing if operational performance weakens
Gray Television's stock price of $5.72 implies a valuation ratio of 0.7x forward EV-to-EBITDA. If you're considering GTN for your portfolio, see our FREE research report to learn more.
Snap-on (SNA)
Trailing 12-Month Free Cash Flow Margin: 18.6%
Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military.
Why Do We Think SNA Will Underperform?
Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
Free cash flow margin shrank by 4.2 percentage points over the last five years, suggesting the company is consuming more capital to stay competitive
Shrinking returns on capital suggest that increasing competition is eating into the company's profitability
Snap-on is trading at $324.76 per share, or 16.9x forward P/E. To fully understand why you should be careful with SNA, check out our full research report (it's free).
Zebra (ZBRA)
Trailing 12-Month Free Cash Flow Margin: 16.4%
Taking its name from the black and white stripes of barcodes, Zebra Technologies (NASDAQ:ZBRA) provides barcode scanners, mobile computers, RFID systems, and other data capture technologies that help businesses track assets and optimize operations.
Why Are We Out on ZBRA?
Products and services are facing significant end-market challenges during this cycle as sales have declined by 2.9% annually over the last two years
Absence of organic revenue growth over the past two years suggests it may have to lean into acquisitions to drive its expansion
Earnings per share have dipped by 3.1% annually over the past two years, which is concerning because stock prices follow EPS over the long term
At $312.06 per share, Zebra trades at 20.5x forward P/E. Read our free research report to see why you should think twice about including ZBRA in your portfolio, it's free.
High-Quality Stocks for All Market Conditions
When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that's already erased most losses.
Don't let fear keep you from great opportunities and take a look at 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 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 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 for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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