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 in 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 proved themselves to be prodigious generators of free cash flow -- 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 FCF growth rates exceeding 25% annually over the past five years, and then we'll pair them with the opinions of the 135,000 members of the Motley Fool CAPS investor-intelligence community, to see which ones might have the best chance of outperforming the market.


Leveraged FCF 5-Year CAGR, %

CAPS Rating (out of 5)

Anadarko Petroleum (NYSE:APC)



Burlington Northern Santa Fe (NYSE:BNI)



HRPT Properties Trust (NYSE:HRP)



Peabody Energy (NYSE:BTU)



Wal-Mart Stores (NYSE:WMT)



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.

For a company that's cleaned the recession's clock by enticing droves of shoppers through its doors with its low-price value proposition, Wal-Mart hasn't exactly been mopping up. In fact, Wal-Mart's stock trades about 10% lower than it did a year ago. Yet that alone might make enough of a case for investors to grab a piece of this deep-discount retailer.

Consumers today have become exceptionally price-conscious and have turned to Wal-Mart because of its everyday low prices. Even though U.S. same-store sales dipped by 1.2% last quarter, the average store actually saw a 1.3% increase in foot traffic. Ignoring currency fluctuations, total sales rose by nearly 3%, to $104 billion. Those numbers look especially good when compared with those of Target (NYSE:TGT), which saw comps drop 6.2%, foot traffic decline by 2.6%, and sales fall by about 3%.

Will a recovering economy drive customers back to the thrifty yet slightly more classy products at Target, as some analysts think? Well, the green shoots are still eggshell-thin, and consumers are going to continue to be frugal for a long time to come, so perhaps not. Wal-Mart's focus on providing the lowest possible prices will remain with the shopper well after we're snapping our fingers at what this recession did to our portfolios.

Yet the deep discounter is not content to let Target have full run of the place among consumers who want to move up the ladder. While not quite going to the same lengths as it did during its memorably horrible foray into high fashion, when it went so far as to host a runway show, Wal-Mart will be stocking Ocean Pacific and L.E.I. in an attempt to increase its fashion level. In addition, it's bringing in industry icon Norma Kamali to help design an exclusive collection that should further improve the store's fashion credibility. Notably, the Kamali relationship was brokered by Cherokee (NASDAQ:CHKE), a clothing company that many Target customers are familiar with.

Wal-Mart has also reached a deal with teen pop star Miley Cyrus to sing some sweet clothing notes -- although fashionistas are not so excited on this front. Of course, the whole Hannah Montana craze has always left people perplexed.

As long as Wal-Mart remembers that its customers shop for price first and style second, they may be able to do very well here. As CAPS member saxonglass puts it:

My reasons are not much different from many others. The consumer appears to be more price conscious than in previous years and the price leader is [Wal-Mart]. Most stocks have risen more than the economy justify, and [Wal-Mart] has been a laggard. It can easily go back to 60 over the next year and from this level of the market, I believe it will be an outperformer.

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. Head over to the completely free CAPS service, and let us hear what you have to say about these or any other stocks that you think will continue to be rolling in the dough.