3 Top-Rated Cash Kings

Welcome back 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:

1. Paying dynasty-building dividends.
2. Buying back shares at attractive prices.
3. Growing the business organically without having to borrow money or sell shares.

A Fool's guide to free cash
Investing, after all, is about putting money up front today in order to get more of it in return tomorrow. Here at the Fool, we're firm believers that free cash flow, as opposed to traditional accounting earnings, is the best gauge of a firm's health and profitability (or lack thereof).

So, with these cash flow lessons deeply ingrained in your Foolish subconscious -- or maybe just bookmarked as a "favorites" page -- I'll highlight three more cash-flow rulers of our Motley Fool CAPS kingdom.

Unlike Circuit City Stores (NYSE:CC) -- which is a cash-burning company that CAPS Fools overwhelmingly dislike -- these are businesses with free cash flow-to-sales margins (also known as the Cash King Margin) of 15% and above, that our community is pretty bullish about.

So, sound the trumpets! Here's another trio of Cash Kings from CAPS:

Sources: Morningstar.com and Motley Fool CAPS. ttm = trailing 12 months.

As always, don't consider these stocks as formal picks, but rather as suggestions worth further investigation. After all, due diligence is the Fool's way to riches.

But just for starters, here's a quick summary of these cash-throwing kings, and how some of their loyal CAPS followers feel about them. 

The Webmaster    
With an impressive free cash flow-to-sales margin of more than 25%, Motley Fool Rule Breakers pick Akamai Technologies takes the honors as this week's most prolific cash king.

As the Internet's leading content delivery network, Akamai has the colossal scale, legitimate intellectual property, and a blue-chip roster of clients -- including Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) -- to keep its war chest stuffed with cash.

Less than two weeks ago, CAPS player singhash touched on why Akamai might be a particularly timely buy:

Rising oil prices are wonderful news for a company like Akamai: driving to the video store costs as much in gasoline as a rental off iTunes -- which, coincidentally, uses Akamai as a content delivery network. Akamai serves an essential function on the web, and it does so in a relatively economical manner. Beyond straightforward content distribution, however, Akamai also provides a number of very useful content distribution and management solutions.

Holy smokes
The next cash-flow monarch on our list is Altria. Over the last several decades, Altria has leveraged its market-share dominance in the U.S., its iconic brand names (like Marlboro, Virginia Slims, and Parliament), and the stable nature of its business model to provide wealth-building dividends and buybacks for shareholders. And, of course, those dividends have been Altria's key to becoming the best-performing stock over the last 50 years.

CAPS player hokiej88 explains why that market-beating trend should only continue:

Very undervalued ... Has plenty of cash stockpiled and can look to acquire more tobacco companies or offer their shareholders an increased dividend or large stock repurchase programs to boost the value of their stock. The fact that they also still own 30% of SABMiller is inviting as well ...

Imperial Infosys
Our last free cash flow ruler this week is India-based Infosys, one of the world's largest IT service companies.

Infosys's cost leadership over the likes of Accenture (NYSE:ACN) and Wipro, its premium-commanding services, and its massive trends toward global outsourcing are what drive the cash for this king. And, as my Foolish colleague Rich Smith recently noted, the stock's weakness over the last few weeks may even be completely unjustified.

In November, CAPS player forexjeff helped spread more info on Infosys:

Indian outsourcing should see revenues universally increase as domestic spending tightens and CIOs across large and mid-cap companies look for cost saving mechanisms ... [Infosys] has fantastic financials, very good management, and good growth opportunity across the board in U.S. and European markets. They are the top dog in India outsourcers, so look for them to move. 

The Foolish bottom line
Free cash flow-generating companies like Akamai, Altria, and Infosys are always among my top candidates to research further. Our Motley Fool CAPS intelligence database is a great place to look for your own Cash Kings or read how your fellow Fools feel about thousands of different stocks.

Click here to join the forward-thinking CAPS community free of charge.

Be sure to join us next time, when I'll feature three more cash kings from CAPS. Until then, may your cash flow reign supreme.