If Jerry Maguire had 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 those numbers to mask a company's true operations. Yet its ability to generate cash -- what comes into the register and goes out the door -- remains the pre-eminent indicator of a company's worth. In short, cash is king.

Below, we'll look at companies that have proven themselves to be prodigious generators of free cash flow (FCF) -- the money a company has left over after investing in its business that it could pay to its investors. We'll find companies whose compounded free cash flow growth rates exceeded 25% annually over the past five years, then pair them with some opinions from Motley Fool CAPS, our investor-intelligence community of more than 135,000 members, to see which ones might have the best chance of outperforming the market.


Levered FCF 5-Year CAGR

CAPS Rating  (out of five)

Diamond Offshore (NYSE:DO)



Dynamic Materials (NASDAQ:BOOM)



El Paso (NYSE:EP)



Forest Labs (NYSE:FRX)



General Mills (NYSE:GIS)



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, so use this list as a jumping-off point for further research.

It happens often enough: We're told that this time it's different, only it never seems to be different. Right now, we're hearing that the extreme divergence between oil and natural gas prices may not correct itself because -- Yep! You guessed it -- this time it's different. And just look at the evidence.

The number of rotary rigs drilling for natural gas has been cut in half, from more than 1,600 at the peak last September down to 800, according to Baker Hughes. Producers such as Chesapeake Energy (NYSE:CHK) and SandRidge Energy (NYSE:SD) have scaled back production. Yet the price of natural gas, which crested at $14 last year, remains around $4 per thousand cubic feet, even as the price of oil has more than doubled from its lows earlier this year.

The culprit, we're told, is a combination of reduced industrial demand and strong supplies. Yet it could easily be argued that demand for oil is weak, too, and inventories for both are high. Nevertheless, the divergence in the prices of oil and gas has reached its widest point in almost two decades.

Even El Paso -- the country's biggest natural-gas transporter -- struck a cautious tone in its most recent earnings call. Company management believes that things aren't different this time and that the gap between oil and gas will be made up by gas prices rising, maybe dramatically so. And that's why CAPS investors are bullish on the company, with 97% of those rating El Paso saying it will outperform the market.

CAPS member jdipietro7 likes El Paso's operations -- its transport and its exploration and production segments -- to carry it higher.

El Paso Corporation is a well diversified (both pipeline and E&P) energy company that is trading below its value. The company has amazing natural gas hedges in place and 40% of overall revenues are locked in every year based on their take-or-pay contracts. I loved them at $6.00, like them now, and would buy up until the $10 range.

Indeed, the Natural Gas tag at CAPS remains highly rated, at four stars. Though stock prices of companies with that tag have fallen by 43% over the past year, as a whole it has moved up 2% over the past month, and its rating suggests that CAPS members think the potential for growth remains strong.

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. Why not 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 to be rolling in the dough?

Chesapeake Energy is a Motley Fool Inside Value selection. Dynamic Materials is a Motley Fool Hidden Gems recommendation, and the Fool owns shares of it.

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.