Had Jerry Maguire been an investor instead of a fictional sports agent, he might have become famous for yelling, "Show me the cash flow!"

Earnings come and go, and the green-eyeshade types can legally manipulate them to mask a company's true operations. Yet a company's ability to generate cash -- what comes into the register and goes out the door -- remains the preeminent indicator of that company's worth. In short, cash is king.

Below, we'll look at companies that have proven to be prodigious generators of free cash flow (FCF) -- the amount of money a company has left over that it could pay to its investors. We'll find companies with compounded free cash flow growth rates of 25% annually or more over the past five years, then pair them with opinions from some of the 130,000 members of the Motley Fool CAPS community to see which ones might outperform the market.


Levered FCF 5-Yr CAGR, %

CAPS Rating    (5 Stars Max)

American Capital (NASDAQ:ACAS)









NYSE Euronext (NYSE:NYX)



Titanium Metals (NYSE:TIE)



Source: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
CAGR = compounded annual growth rate.

Generating copious amounts of cash doesn't make a company an automatic buy. But having looked at Enron's cash flows instead of its earnings would have saved many investors a lot of grief. Warren Buffett understands that the value of a company today is calculated by its discounted future cash flows. In that light, we recommend you use this list as a starting point for further digging.

The commercial aerospace sector has become a key consumer of titanium, accounting for nearly 60% of Titanium Metals' revenues in 2008. But it's no wonder that demand for the metal has weakened. The economy is in upheaval, and then there were delays with both the Boeing (NYSE:BA) 787 and the Airbus A380, not to mention the Boeing machinists' strike that was settled only in November.

The Airline Monitor, an industry publication, forecasts that deliveries of commercial aircraft over the next five years will be 16% below the estimate it had made in July. Boeing and Airbus booked new orders for planes at a lower rate than they had from 2005 to 2007, and Boeing does not plan to increase its build rates to make up for the aircraft that weren't delivered because of the strike. Moreover, the manufacturer announced that the most recent delays of the 787 will postpone the first aircraft delivery until 2010.

In straits like this, Titanium Metals' lean structure shines through. The company doesn't have any debt, so it doesn't need to worry about troublesome servicing payments, and it can keep expenses low. That said, it has one niggling problem that needs addressing: With 43% of its pension plan assets listed as debt securities, I wonder whether it isn't being too aggressive in suggesting a long-term rate of return of 10%. But the company has enough cash on its balance sheet to meet its near-term funding requirements; investors shouldn't worry right now, but would be wise to remember it, too.

Titanium Metals also joined a long list of companies that have decided to suspend quarterly dividend payments to conserve cash. As difficult as that news is for shareholders, it was only in the fourth quarter of 2007 that Titanium Metals had begun making those payments. I find it much more dramatic that Dow Chemical (NYSE:DOW) broke a 97-year record of dividend payments.

CAPS member hevElee seems to agree that the economy is weighing heavily on Titanium Metals. If Fed Chairman Ben Bernanke is correct in predicting that we've hit bottom, then the company ought to rebound: "Once we get out of this current bust of an economy, I foresee the uses for titanium on the upswing, much moreso than the S&P as a whole. Good company with no debt, poised to take advantage of a turn-around."

Follow the money
While these stocks have left a trail of dollars, it pays to start your own research on Motley Fool CAPS. Read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made -- all from a stock's CAPS page. The service is free, so let us hear what you have to say about these or any other stocks with lots of free cash flow.

Garmin is a Motley Fool Global Gains recommendation and NYSE Euronext is a Rule Breakers pick. Apple and Titanium Metals are Stock Advisor recommendations. American Capital used to be an Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings. The Motley Fool has a disclosure policy.