3 Stocks Growing Free Cash Flow Fast
- By Alberto Abaterusso
If you are in search of investment opportunities amid U.S.-listed equities, you may want to have a look at the stocks listed below, as they have grown their free cash flow (FCF) remarkably over recent years. This should allow them more flexibility for financing the advancement of projects and returning cash to shareholders.
Wall Street is also quite positive about these stocks, as sell-side analysts have issued optimistic ratings for them.
Alibaba Group Holding Ltd
The first company investors should have a look at is Alibaba Group Holding Ltd (NYSE:BABA), a Chinese internet retail giant.
The below table shows that the free cash flow per share has grown by 6.6% over the last 12 months, by 28.30% per year over the last five years and by 60% per year over the last 10 years.
The company is expected to increase earnings at an annual average growth rate of 3.5% over the next five years.
On Wall Street, as of February, the stock has 18 strong buys, 29 buys and one hold recommendation rating for an average target price of $325.22 per share, reflecting a 36.8% upside from Friday's closing price of $237.76 per share.
The share price has climbed 12.69% over the past year through Friday for a market capitalization of $644.92 billion and a 52-week range of $169.95 to $319.32.
NVIDIA Corp
The second company investors should have a look at is NVIDIA Corp (NASDAQ:NVDA), a Santa Clara, California-based producer of graphics processing units and system on chip units for the consumer electronics, computer hardware, semiconductors and video game industries.
The below table illustrates that the free cash flow per share increased 8.1% over the last 12 months, 33.80% per year over the last five years and by 25.90% per year over the last 10 years.
For the next five years, earnings per share are forecasted to increase by a 23% annual average growth rate.
On Wall Street, as of February, the stock has seven strong buys, 14 buys, 15 holds, one underperform and one sell recommendation rating. The average target price of $627.87 reflects a 14.5% upside from the share price of $548.58 at close on Friday.
The share price has grown 98.45% over the past year through Friday for a market capitalization of $339.57 billion, a forward dividend yield of 0.12% (based on a quarterly cash dividend of 16 cents to be paid on March 31) and a 52-week range of $180.68 to $614.90.
PayPal Holdings Inc
The third company investors should have a look at is PayPal Holdings Inc (NASDAQ:PYPL), a San Jose, California-based provider of an online payment system to consumers and merchants worldwide.
The below table exhibits that the free cash flow per share has grown by 48.30% over the last 12 months and by 22.50% per year over the last five years.
Looking ahead, analysts estimate earnings per share will increase by 22.24% on average every year over the next five years.
On Wall Street, as of February, the stock has 14 strong buys, 18 buys and 12 hold recommendation ratings for a target price of $308.04, representing an 18.55% upside from Friday's closing price of $259.85 per share.
The share price has added 130.24% over the past year through Friday, determining a market capitalization of $304.33 billion and a 52-week range of $82.07 to $309.14.
Disclosure: I have no positions in any security mentioned.
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This article first appeared on GuruFocus.
