Companies With High Free Cash Flow Margins and High Free Cash Flow Yields Massively Outperform the Market Over Time

Companies With High Free Cash Flow Margins and High Free Cash Flow Yields Massively Outperform the Market Over Time

An increase in ROIC always increases intrinsic business value but revenue growth does not always increase intrinsic value. Revenue growth only increases intrinsic value when ROIC is greater than the weighted average cost of capital (WACC). Companies with high ROIC outperform the stock market by a country mile.