Of all the financial metrics that impact a company as an investment prospect, cash flow is often overlooked—but it is perhaps the single most important factor in a firm's ability to return value to shareholders via dividends and stock buybacks. Companies with strong cash flow can continue to pay (and raise) dividends, repurchase shares, and pay down debt proactively, all of which are highly attractive to investors. Moreover, strong cash flow is often a mark of a high-quality business that is operating cleanly and sustainably.
Investors seeking targets with good cash flow might look to the three names below as a place to start. While each occupies a different industry—and has a different relationship with cash flow as a result—all have a record of success in this area.
