Welcome to the world of the Cash Kings, where we highlight businesses that generate a healthy dose of free cash flow. Why is cash flow so important? Because it gives management the opportunity to boost shareholder value through actions like: Paying dynasty-building dividends; Buying back shares at attractive prices and Growing the business organically without having to borrow money or sell shares.
Unlike homebuilder KB Home, a cash-burner that our community is currently bearish on, these are businesses with free cash flow-to-sales margins of at least 15% -- also known as the Cash King Margin -- that have received a CAPS rating of four or five stars (out of five): American Tower (NYSE: AMT), Altria (NYSE: MO) and Stryker (NYSE: SYK). Free cash flow-generating companies like American Tower, Altria, and Stryker are always among my top candidates to research further.
Source: Motley Fool
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