3 Cash Machine Stocks We Love and 1 We Hate

Free cash flow is what a company has left after running the business and paying for new equipment: cash from operations minus capital spending. It pays for dividends, buybacks and debt repayment without borrowing. With the 10-year Treasury yield at 5.00% on Monday, Treasury data show, a stock has to earn its keep in cash.

So we screened the companies we track, most of them in the S&P 500, leaving out financial firms and property trusts, whose cash flows don’t compare. We kept those that turned at least 30% of revenue into free cash flow over their latest four quarters reported to the SEC, and whose market value was no more than 20 times that free cash flow. That means a free-cash-flow yield of at least 5%, the same as the Treasury. Sixteen passed. Three of the cheapest, Adobe, Intuit and Booking Holdings, are also 28–50% below their 52-week highs, so we’re saving them for Wednesday’s list of beaten-down quality stocks. Prices are Monday’s closes, 26 October.

We loveGDDYGoDaddy · Internet Services & Infrastructure$106.21−18.9% 1yWe loveCRMSalesforce · Application Software$240.89−5.5% 1yWe loveMOAltria · Tobacco$73.49+13.6% 1yWe hateMETAMeta · Interactive Media & Services$620.19−16.0% 1y

3 stocks we love

1. GoDaddy (GDDY)

Free-cash-flow margin, last 12 months: 33.4%. GoDaddy sells web domains, hosting and website tools, mostly to small businesses.

1. Free cash flow was $1.70 billion in the 12 months to 30 June 2026, up 17% from $1.45 billion a year earlier, on revenue of $5.10 billion.
2. Capital spending was just $26 million, so nearly all of its $1.73 billion of operating cash was free.
3. It spent $1.63 billion buying back shares, nearly all its free cash flow. The catch is the balance sheet: $3.82 billion of debt and only $7 million of shareholders’ equity on 30 June.

At $109.82, GoDaddy is worth $13.9 billion, or 8.2 times free cash flow, a 12.2% yield. It also trades at 15.3 times net income of $910 million. The stock is down 11.5% this year, and we think the market is paying too little for a business that grew revenue 7.4%.

2. Salesforce (CRM)

Free-cash-flow margin, last 12 months: 34.5%. Salesforce sells software that companies use to manage sales, customer service and marketing.

1. Free cash flow rose 21% to $15.15 billion in the 12 months to 31 July 2026, faster than revenue, which grew 11.2% to $43.94 billion.
2. Capital spending fell to $596 million from $672 million, so growth isn’t eating the cash.
3. It bought back $35.07 billion of stock over those 12 months, $27.25 billion of it in the quarter to 30 April. Long-term debt rose to $39.29 billion on 31 July from $14.44 billion on 31 January, so borrowing paid for much of it. That is the risk we’re accepting.

At $247.61, Salesforce is worth $203.8 billion: 13.4 times free cash flow (a 7.4% yield) and 21.1 times net income of $9.66 billion. The stock is down 6.5% this year.

3. Altria (MO)

Free-cash-flow margin, last 12 months: 38.8%. Altria sells Marlboro cigarettes and other tobacco products in the US.

1. Free cash flow was $9.11 billion in the 12 months to 30 June 2026 on net revenue of $23.46 billion, after only $296 million of capital spending.
2. The operating margin was 46.8% even as revenue slipped 0.6%. Shrinking cigarette sales are the long-term risk, but operating income held at $10.97 billion, against $11.05 billion a year earlier.
3. Altria paid $7.06 billion in dividends, covered 1.3 times by free cash flow.

At $73.62, Altria is worth $122.9 billion: 13.5 times free cash flow (a 7.4% yield) and 15.4 times net income of $7.97 billion. The stock is up 27.7% this year and sits 3.2% below its 22 October closing high. Altria reports third-quarter results on Thursday, 29 October.

1 stock we hate

Meta (META)

Free-cash-flow margin, last 12 months: 11.9%. Meta owns Facebook, Instagram and WhatsApp, and is one of the biggest spenders on AI data centers.

1. Capital spending jumped to $104.44 billion in the 12 months to 30 September 2026 from $62.73 billion. Free cash flow fell 36% to $28.65 billion, even though revenue rose 27.5% to $241.6 billion. In the third quarter alone, free cash flow by Meta’s own measure was negative $2.12 billion, and Meta raised the low end of its 2026 spending forecast to $135 billion.
2. Operating income slipped to $79.38 billion from $81.90 billion, partly on a $9.89 billion legal charge in the third quarter, and the operating margin fell to 32.9% from 43.2%.
3. Meta bought back no stock in the first nine months of 2026, against $26.25 billion a year earlier. On Monday it said it plans to sell up to $95 billion of new shares, which would shrink each existing holder’s slice.

At $630.56, Meta is worth $1.61 trillion. That is a reasonable 21.4 times net income, but 56 times free cash flow, a 1.8% yield, well below the 10-year Treasury. Meta is still very profitable; we just wouldn’t pay that much for cash it spends on construction.

We’ll rerun this screen in mid-November, once the third-quarter filings are in.