The stocks that turn the most revenue into cash
2026-07-03 · By Lubin Danilo, founder of Lubin Investment
Among the 74 companies my screener rates as top quality, AppLovin, Kinsale Capital and Mastercard convert the most revenue into real cash, with free cash flow margins above 50%. That number measures a business's cash profitability, not its price: a stock can be a cash machine and still be expensive.
Key takeaways
- Among the 74 stocks rated 10 out of 10 by my screener, AppLovin, Kinsale Capital and Mastercard convert the most revenue into real, usable cash, with free cash flow margins between 50% and 72%.
- Free cash flow margin measures a company's cash profitability: a number independent of its stock price, not to be confused with the price-to-free-cash-flow ratio (P/FCF), which measures valuation.
- Software, specialty insurers and payment networks dominate this ranking because each extra sale costs almost nothing to produce.
- A huge FCF margin is not a buy signal on its own: ASML shows a margin of 33.8% but trades at 51.6 times its free cash flow, while Kinsale Capital, at a 51.9% margin, trades at just 7.1 times its own.
- This ranking complements my ranking of companies rated 10 out of 10: it isolates pure cash profitability, before even talking about price.
Free cash flow margin: the real signal of cash profitability
Free cash flow is the money that truly stays in a company's bank account once every bill is paid: salaries, equipment, taxes, everything. It is not accounting profit, which can be shaped by depreciation choices or one-off items. Cash does not lie.
Free cash flow margin measures that cash against revenue. A company that sells 100 dollars of goods and keeps 30 dollars of usable cash has an FCF margin of 30%. The higher that number, the fewer extra sales are needed to generate one more dollar of usable cash, to pay down debt, buy back shares or fund growth without borrowing.
It is a completely different number from P/FCF (price-to-free-cash-flow), the ratio I usually use to judge whether a stock is expensive or cheap. P/FCF divides the stock price by the cash generated: it talks about the price the market is willing to pay. FCF margin does not even mention the share price. It measures the intrinsic quality of the economic engine, regardless of what the stock is worth today. A company can have a huge FCF margin and still be a bad deal in the market if it is too expensive, and the reverse is just as true.
Why I built this ranking out of my 74 perfect scores
My screener grades every stock I analyze against 10 criteria: profitability, sales growth, cash per share growth, discipline on share count, margins, return on invested capital, among others. Right now, 74 companies worldwide earn the maximum score. On paper, these are the strongest businesses my tool knows about.
But a maximum quality score says nothing about relative cash profitability. Two companies can both pass every criterion and have FCF margins of 10% for one and 70% for the other. I wanted to know, inside this already hand-picked group, who converts the most revenue into usable cash. It is an angle I had never published before: usually I look at price, through P/FCF; here I am looking only at the engine.
I ran a sample of 37 of these 74 stocks through my analysis tool to pull their real FCF margin, calculated over the trailing twelve months. Here is the result, ranked from highest to lowest.
The ranking: the 10 companies that turn the most revenue into cash
| Stock | Sector | Free cash flow margin |
|---|---|---|
| AppLovin (APP) | Mobile ad tech | 71.9% |
| Kinsale Capital (KNSL) | Specialty insurance | 51.9% |
| Mastercard (MA) | Payments network | 50.6% |
| RenaissanceRe (RNR) | Reinsurance | 36.5% |
| ASML Holding (ASML) | Semiconductor equipment | 33.8% |
| Exelixis (EXEL) | Biopharmaceuticals | 33.7% |
| Moody's (MCO) | Financial data and ratings | 31.9% |
| Doximity (DOCS) | Digital network for physicians | 31.8% |
| Qualys (QLYS) | Cybersecurity software | 31.1% |
| Booking Holdings (BKNG) | Online travel | 30.4% |
Three families of business keep showing up in this ranking: software (Qualys, Doximity), specialty insurance (Kinsale Capital, RenaissanceRe) and networks that collect a toll on every transaction (Mastercard). That is not a coincidence.
Why software, specialty insurance and payment networks dominate
Take AppLovin, at the top with a 71.9% FCF margin. Its business is running an advertising algorithm that places ads inside mobile games. Once the platform is built, serving a million more ads costs almost nothing: no factory, no inventory, no truck to load. That is the definition of a marginal cost near zero, and it is what lets a company keep 70 cents of cash on every dollar of sales.
Mastercard, at 50.6%, runs on the same logic without selling any software at all: it operates a network connecting banks, merchants and customers, and takes a fee on every payment that flows through it. The network already exists; processing one more transaction costs next to nothing.
Kinsale Capital and RenaissanceRe follow a different but equally powerful logic. They are insurers that collect premiums before paying claims, sometimes years later. That money collected in advance, called float, can be invested in the meantime, and disciplined underwriting, insuring only what earns more than it costs in claims, turns a large share of revenue into net cash. Kinsale specializes in complex risks that mainstream insurers turn down, which lets it price with less direct competition.
By contrast, a restaurant chain or an industrial manufacturer has to reopen its wallet for every extra sale: ingredients, staff, machinery, upkeep. Their FCF margin is structurally capped lower, even when they are excellent businesses. That is not a flaw, it is the nature of the business.
Does a huge FCF margin mean you should buy the stock?
No, and that is the trap in this kind of ranking. FCF margin talks about the economic engine, not what the market makes you pay to access it. Look at the gap between ASML and Kinsale Capital: both show an excellent FCF margin, between 33% and 52%. But ASML currently trades at 51.6 times its annual free cash flow, while Kinsale Capital trades at just 7.1 times its own. At current prices, you are paying far more for every dollar of cash ASML generates than for every dollar Kinsale generates.
RenaissanceRe is even more striking: an FCF margin of 36.5%, one of the best in the ranking, for a valuation of barely 2.9 times its free cash flow. That kind of gap looks, on paper, like a pricing anomaly. But a low P/FCF in insurance can also reflect the cyclical nature of the sector, since reinsurer results swing heavily with the year's natural catastrophes, not just a free lunch of undervaluation.
The right way to read this ranking is as a first step: it tells you who has the best cash engine, not who is the best deal today. For that, you then need to look at price separately, which is what I do systematically on every analysis page before forming an opinion.
The limits of this sample
I did not query all 74 stocks rated 10 out of 10, only a sample of 37, prioritizing the best-known American names and the ones already cited in my other articles. Names like Shopify, Booking and Autodesk are included, but other maximum-rated companies, including some Asian and Latin American stocks on the list, were not screened this time. The ranking could therefore shift if I expand it to the full 74.
I will recalculate this ranking regularly as quarterly results update the free cash flow figures. An FCF margin is not set in stone: it moves with the economic cycle, one-off investments, or a quarter of over or underperformance.
How I use this in my method
In my way of judging a stock, FCF margin is one of the ten criteria that must be met for a company to earn the maximum score. But I never stop there: once quality is confirmed, I look at price separately, using P/FCF and a reasonable buy price calculated under conservative assumptions. That strict separation between quality and price is what structures my entire methodology, and it is exactly what I wanted to be able to check in seconds for any stock, so I built it into my analysis tool.
If you want to dig into one of the ten companies in this ranking, the full AppLovin analysis and the Mastercard analysis break down every criterion, the FCF margin, the P/FCF and the reasonable buy price calculated for each.
FAQ
What is free cash flow margin?
It is the percentage of revenue that turns into real, usable cash after all expenses and investments. A margin of 30% means that out of 100 dollars of sales, 30 dollars remain as usable cash.
What is the difference between FCF margin and P/FCF?
FCF margin measures a business's cash profitability, independent of its stock price. P/FCF measures valuation: the stock price divided by the cash generated. A company can have a huge FCF margin and still trade expensively, or the reverse.
Why do software companies dominate this kind of ranking?
Because once the platform is built, serving one more customer costs almost nothing: no factory, no inventory, no extra labor proportional to sales. That near-zero marginal cost leaves a huge share of every sale as cash.
Is a high FCF margin a buy signal?
No. It measures the quality of the economic engine, not the price you have to pay to access it. A company with a huge FCF margin can still be badly overvalued. Always check the valuation separately before concluding anything.
How was this ranking built?
From the 74 stocks currently rated at the maximum by my quality screener, I pulled the real trailing twelve month free cash flow margin for a sample of 37 of them using my analysis tool, then ranked the 10 highest margins.
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About the author
Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).