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 its ability to generate cash -- what comes in the register and goes out the door -- remains the preeminent indicator of company's worth. In short, cash is king.

Below, we'll look at companies that have proven themselves prodigious generators of free cash flow (FCF) -- the amount of money a company has left over that it could potentially pay to its investors. We'll find companies that have generated compounded free cash flow growth rates exceeding 25% annually over the past five years, then pair them with the opinions of the more than 140,000 members of the Motley Fool CAPS investor intelligence community, to see which ones might have the best chance of outperforming the market.


Levered FCF 5-Year CAGR, %

CAPS Rating (out of 5)

First Industrial Realty Trust (NYSE:FR)






Oshkosh (NYSE:OSK)



Transocean (NYSE:RIG)



Walgreen (NYSE:WAG)



Sources: Capital IQ, a division of Standard & Poor's; 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, so use this list as a jumping-off point to dig deeper into the piles of cash.

Maybe Garmin has it right after all, even if they were late to the game. I admit to being skeptical about the nuvifone G60 making inroads into the smartphone market, even if it integrates phone service into a GPS device with voice, data, email, and mobile Web functions. It carries a too-high price tag and doesn't support corporate email, and Garmin limited its availability with an exclusive contract with AT&T (NYSE:T). In short, it doesn't do anything the iPhone can't do with a simple app installed for less.

Despite Apple (NASDAQ:AAPL) being the wunderkind of tech these days, Garmin may yet find its way forward. The market analysts at Forrester Research say that while one-third of consumers in North America currently own or use some sort of GPS device (either a standalone unit or a car-based system), phone-based navigation will become the preferred means of finding your way around by 2013.

Since younger people today essentially have a mobile phone attached to their bodies at all times, integrating that with social networking and navigation will become the next essential leap forward. Garmin -- with a phone and GPS device already neatly packaged together -- might actually be an industry leader when that advance arrives. Would an iPhone be as able to seamlessly integrate those functions together as the nuvifone? Apple proponents would certainly say yes, but advocates for Garmin might want to make that case as well.

Right now, the negativity surrounding the nuvifone is palpable. Professional reviews have been less than stellar, and some CAPS members make the case that Garmin has bitten off more than it can chew with this one. While ObscuredVision says you need to have a long-term outlook with the GPS maker, All-Star Snowhound says the route Garmin took with the nuvifone was simply wrong:

Garmin makes great standalone GPS's, but this one is going to give them indigestion. They didn't want to develop for the iPhone or Android, they wanted to be different and release their own device and I respect that. However, then they need to compete with the others in price, features and quality. In this case they failed on all accounts. Sorry but this was a big mistake.

4Foolz chimes in that the stock will end up being hurt when operating performance takes a hit as a result of the foray into smartphones:

While the stock appears cheap, the contracting margins and the expensive foray into the cell phone business will keep the stock price depressed. This company is just fighting against the wave that is the GPS commoditization.

However, if Garmin were first to market with a phone that somehow integrated calling, navigation, and social networking, it could claim the mantle as a true industry innovator.

Follow the money
What's your view? 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. Head over to the completely free CAPS service and let us hear what you've got to say about these -- or any other stocks that you think will continue rolling in the dough.

Apple is a Motley Fool Stock Advisor pick. Garmin is a Motley Fool Global Gains selection. Try any of our Foolish newsletter services 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.