Cash flow is an essential component for many successful companies, allowing firms to fund new growth via acquisitions or increased production while also reducing the need to rely on debt and providing financial stability. Still, investors may be inclined to overlook cash flow in favor of other key metrics—in doing so, however, they risk missing out on excellent opportunities to buy into companies with the flexibility and stability to expand their operations.
When combined with strong performance in another category—excellent sales growth, for instance, or already-impressive cash reserves—companies with healthy cash flow can deliver excellent value to shareholders. The three companies below stand out not only for their prospects as deliverers of cash flow, but also for a variety of other factors ranging from momentum to earnings growth.
