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Look Past Earnings: 4 Stocks Generating Rising Cash Flows

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Key Takeaways

  • DNOW, PRSU, REPX and RFIL show latest-quarter cash flow at or above their 5-year averages.
  • DNOW posts rising earnings estimates and a VGM Score of A, highlighting strong cash flow efficiency.
  • PRSU, REPX and RFIL show estimate upgrades and solid VGM Scores, backing improving cash trends.

Crunching profit numbers and evaluating surprises might appear as a good option in the ongoing reporting cycle, but these do not ensure that the profits are being efficiently channeled to the reserves for funding growth. This is because even a profit-making company can have a deficiency of cash flow and go bankrupt while meeting its obligations.

One must look at a company’s proficiency in generating cash flows before investing in the right stocks. This is because cash is the most indispensable factor for any company. It gives strength and vitality and is the key to its existence, development and success. This view is particularly relevant in light of the ongoing global economic uncertainty, coupled with market disruptions and dislocations.

In this context, stocks such as DNOW Inc. (DNOW - Free Report) , Pursuit Attractions and Hospitality, Inc. (PRSU - Free Report) , Riley Exploration Permian, Inc. (REPX - Free Report) and RF Industries, Ltd. (RFIL - Free Report) emerge as compelling picks, supported by improving cash flow trends.

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 four out of five stocks that qualified the screening:

DNOW is a leading energy and industrial solutions provider with a global network of distribution and engineering locations. 

DNOW has an expected earnings growth rate of 20.5% for 2026. The consensus estimate for DNOW’s 2026 earnings has been revised 8.7% upward over the past 30 days. DNOW has a VGM Score of A.

Pursuit Attractions and Hospitality is an attraction and hospitality company that owns and operates hospitality destinations in the United States, Canada, Iceland and Costa Rica. PRSU operates various attractions and lodges with integrated restaurants, retail and transportation facilities.

The Zacks Consensus Estimate for Pursuit Attractions and Hospitality’s 2025 and 2026 earnings per share has improved 1.6% and 10.3% over the past 60 days, respectively. PRSU has a VGM Score of B.

Riley Exploration Permian is an independent oil and natural gas company operating in Texas and New Mexico, focused on horizontal drilling in the Permian Basin.

The Zacks Consensus Estimate for Riley Exploration Permian’s 2025 and 2026 earnings per share has improved 5.0% and 14.2%, respectively, over the past 60 days. REPX has a VGM Score of B.

RF Industries is a designer and manufacturer of interconnect products, serving telecom, data communications and industrial markets with RF connectors, cables, passives, fiber solutions, cooling systems and integrated small cell enclosures supporting next-generation connectivity globally.

The Zacks Consensus Estimate for fiscal 2026 earnings of RFIL has been revised 22.9% over the past week. RFIL has a VGM Score of B.

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.

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