Welcome back to the world of the Cash Kings, where we highlight businesses that generate a healthy dose of free cash flow. Why is free cash flow so important? Simple. 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 a stock such as Plug Power (NASDAQ:PLUG) -- a cash-burning company that CAPS generally dislikes -- these are companies with free cash flow-to-sales margins above 15% (also known as the Cash King Margin) that our community is overwhelmingly bullish about.

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


Cash King Margin (ttm)

CAPS Bulls

CAPS Bears

Autodesk (NASDAQ:ADSK)




FactSet Research Systems (NYSE:FDS)




Graco (NYSE:GGG)




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.

Designing the perfect kingdom
With a whopping free cash flow-to-sales margin higher than 25%, Autodesk takes the honors as this week's most prolific cash king. As the world's undisputed leader of computer-aided design drafting (CAD) software, Autodesk has the dominant market share, cutting-edge modeling solutions, and high switching costs for its architectural clients (most designers and engineers are trained on Autodesk software) to keep its canons stuffed with cash.

In addition, CAPS all-Star han810p believes the company's new Building Information Modeling (BIM) tool -- which assists project managers in all aspects of the construction process -- puts Autodesk in a great position to capitalize on the global trend toward more sophisticated architecture:

"Autodesk has most of the drafting market, and the adoption to BIM is sweeping the construction industry. That will mean a lot of purchases of the software. As buildings become more complex, and designers look for ways to get construction document costs down, this stock should go up."

Sultan of stock sources
FactSet Research Systems is a free-cash-flowing ruler that utilizes an integrated online platform as one of the leading providers of economic and financial data in the world. Specifically, FactSet pools more than 200 databases from multiple sources -- including the likes of Moody's (NYSE:MCO), Value Line (NASDAQ:VALU), and Reuters Group (NASDAQ:RTRSY) -- to give investment professionals a convenient, single source of information.

Thanks to a history of steady growth, impressive profitability, and a well-entrenched position in a fairly narrow market, Gouldberg believes this cash king will be keeping its facts -- and shareholder returns -- straight for a very long time:

"Amazingly consistent earnings growth. ROA and ROE both consistently above 20%. A "boring" company providing a "boring" service with built-in repeat business. Very little Wall St. coverage. Should prove a long-term winner."

Graco the great
Our last free cash flow king this week is Graco, a global leader in viscous fluid handling systems. Graco's technology gives a wide variety of clients around the world -- including roofers, painters, service garages, and fleet service centers -- the ability to dispense and apply super-sticky fluids with ease. Graco has grown its earnings per share nearly 20%, on average, for the past 10 years and consistently posts returns on invested capital (ROIC) in the 40% range.

That type of financial strength and demand for Graco's innovative solutions has our CAPS community excited about the firm's future. For example, dvcnut lets us in on this sticky situation:

"This is one of those small, under-followed, boring companies that Peter Lynch would like. Management is very shareholder-friendly, having done a number of special one-time dividends by using the large amount of FCF they generate. A few years ago they paid off all of their debt, but still generate very high ROE."

The Foolish bottom line
Free cash flow-generating companies like Autodesk, FactSet Research Systems, and Graco 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 week, when I'll feature three more cash kings from CAPS. Until then, may your free cash flow reign supreme.

For more CAPS-style Foolishness:

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Fool's disclosure policy is the strict set of rules that always rules Fools.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.