Parking your hard-earned money in stocks based on top-line growth and increasing profit might appear a good option in the ongoing reporting cycle. But looking beyond the profits and figuring out a company’s efficiency in generating cash flows is far more rewarding.

This is because even a profit-making company can face cash trouble and end up being bankrupt while meeting its obligations. But a company with solid cash flow can endure any market mayhem besides enjoying flexibility in decision-making, chasing potential investments and fueling its growth engine.

In this regard, stocks like Marubeni Corporation (MARUY Quick QuoteMARUY - Free Report) , Arch Resources, Inc. (ARCH Quick QuoteARCH - Free Report) , Veritiv Corporation and Arcos Dorados Holdings Inc. (ARCO Quick QuoteARCO - Free Report) are worth buying.

Amid uncertainties in the global economy, market disruptions and dislocations, as well as liquidity concerns resulting from geopolitical tensions or the health crisis, analyzing a company’s cash-generating efficiency has indeed become more relevant.

To figure out this efficiency, one needs to consider a company’s net cash flow. While in any business cash moves in and out, it is net cash flow that explains how much money a company is actually generating.

If a company is experiencing a positive cash flow, it denotes an increase in its liquid assets, which gives it the means to meet debt obligations, shell out for expenses, reinvest in the business, endure downturns and finally return wealth to shareholders. On the other hand, a negative cash flow indicates a decline in the company’s liquidity, which in turn lowers its flexibility to support these moves.

However, having a positive cash flow merely does not secure a company’s future growth. To ride on the growth curve, a company must have its cash flow increasing because that indicates management’s efficiency in regulating its cash movements and less dependency on outside financing for running its business.

Therefore, keep yourself abreast with the following screen to bet on stocks with rising cash flows.

Screening Parameters:

To find stocks that have seen increasing cash flow over time, we ran the screen for those whose cash flow in the latest reported quarter was at least equal to or greater than the 5-year average cash flow per common share. This implies a positive trend and increasing cash over a period of time.

In addition to this we chose:

Zacks Rank 1: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) have a proven history of outperformance. You can see the complete list of today’s Zacks #1 Rank stocks here.

Average Broker Rating 1: This indicates that brokers are also highly hopeful about the company’s future performance.

Current Price greater than or equal to $5: This sieves out low-priced stocks.

VGM Score of B or better: This score is also of great assistance in selecting stocks. Importantly, this scoring system helps in picking winning stocks in their industry categories.

Here are our four picks out of the 18 stocks that qualified the screening:

Marubeni Corporation, based in Tokyo, Japan, purchases, distributes and markets various industrial and consumer goods worldwide. It imports, exports and trades within the Japanese market in food, textiles, materials, pulp and paper, chemicals, energy, metals and mineral resources, and transportation machinery. It is also engaged in power projects and infrastructure, plants and industrial machinery, real estate development and construction, and finance, logistics and information industry.

The Zacks Consensus Estimate for Marubeni’s earnings for the fiscal year ending March 2023 has moved 7.7% north in the past month. MARUY currently has a VGM Score of A.

Arch Resources is one of the largest coal producers in the United States, operating nine mines across the major coal basins of the country. The locations of its mines and access to export facilities enable the company to ship coal worldwide.

The Zacks Consensus Estimate for Arch Resources’ 2023 earnings has been revised 17.6% upward to $46.10 per share in the past month. Currently, ARCH has a VGM Score of A.

Veritiv Corporation engages in offering North American business-to-business distribution solutions. It provides packaging, print and print management, publishing, supply chain, facility and logistics solutions that span the entire lifecycle of core business operations.

The Zacks Consensus Estimate for 2023 earnings has moved up 4% in the past two months to $16.80 per share. Currently, VRTV carries a VGM Score of B.    

Arcos Dorados Holdings Inc. operates as a franchisee of McDonald's, with its operations divided into Brazil; North Latin America division; South Latin America and the Caribbean division. ARCO also runs quick-service restaurants in Latin America and the Caribbean.

The Zacks Consensus Estimate for 2023 earnings has improved 7% over the past week to 61 cents per share. Currently, ARCO carries a VGM Score of A.

Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and back-testing software.

The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.

Click here to sign up for a free trial to the Research Wizard today.

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.