Bargain Shopping in 2023? 3 Wildly Undervalued Stocks to Buy Now
Free cash flow (FCF) generation is of the utmost importance for investors. That metric -- defined as cash from operations minus capital expenditures -- represents the funds a company has easily available to buy back shares, pay dividends, repay debt, or reinvest in the business. Naturally, the more FCF, the better.
A great way to measure a company's FCF generation is by studying its FCF yield -- which is FCF per share divided by its share price. One way to think about this figure is to say that a company could theoretically fund a dividend at this percentage using nothing but its cash generation.
Anytime these yields rise above their historic averages, it should catch investors' attention -- potentially highlighting discounted operations. Three stocks which fit that description now are Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Thor Industries (NYSE: THO), and NVR (NYSE: NVR).
Source Fool.com
