While strong cash flow is a key indicator of stability, it doesn’t always translate to superior returns. Some cash-heavy businesses struggle with inefficient spending, slowing demand, or weak competitive positioning.

Cash flow is valuable, but it’s not everything - StockStory helps you identify the companies that truly put it to work. Keeping that in mind, here is one cash-producing company that reinvests wisely to drive long-term success and two that may struggle to keep up.

Two Stocks to Sell:

Delta (DAL)

Trailing 12-Month Free Cash Flow Margin: 4.5%

One of the ‘Big Four’ airlines in the US, Delta Air Lines (NYSE:DAL) is a major global air carrier that serves both business and leisure travelers through its domestic and international flights.

Why Are We Out on DAL?

1. Performance surrounding its revenue passenger miles has lagged its peers

2. Projected sales decline of 1.6% for the next 12 months points to a tough demand environment ahead

3. Negative returns on capital show management lost money while trying to expand the business

At $41.80 per share, Delta trades at 6.7x forward price-to-earnings. Check out our free in-depth research report to learn more about why DAL doesn’t pass our bar .

FTI Consulting (FCN)

Trailing 12-Month Free Cash Flow Margin: 4.3%

With a team of experts deployed across 30+ countries to tackle complex business challenges, FTI Consulting (NYSE:FCN) is a global business advisory firm that helps organizations manage change, mitigate risk, and resolve disputes across financial, legal, operational, and regulatory matters.

Why Does FCN Worry Us?

1. Estimated sales growth of 2.1% for the next 12 months implies demand will slow from its two-year trend

2. Expenses have increased as a percentage of revenue over the last five years as its adjusted operating margin fell by 2.8 percentage points

3. Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 5.6 percentage points

FTI Consulting’s stock price of $166.28 implies a valuation ratio of 20.6x forward price-to-earnings. If you’re considering FCN for your portfolio, see our FREE research report to learn more .

One Stock to Buy:

Booz Allen Hamilton (BAH)

Trailing 12-Month Free Cash Flow Margin: 7.2%

With roots dating back to 1914 and deep ties to nearly all U.S. cabinet-level departments, Booz Allen Hamilton (NYSE:BAH) provides management consulting, technology services, and cybersecurity solutions primarily to U.S. government agencies and military branches.

Why Do We Love BAH?

1. Core business can prosper without any help from acquisitions as its organic revenue growth averaged 13.2% over the past two years

2. $11.78 billion in revenue allows it to spread its fixed costs across a wider base

3. Share repurchases have amplified shareholder returns as its annual earnings per share growth of 14.5% exceeded its revenue gains over the last five years