Why Investors Should Focus on High Cash Flow Stocks & ETFs

Investors believe that “cash is king” in the current environment of persistent inflation, high interest rates, and a potential economic slowdown. As a result, ETFs focused on companies that generate a substantial amount of cash have garnered significant interest from investors this year.

According to the legendary investor Warren Buffett, free cash flow—the cash remaining after a company has covered expenses, interest, taxes, and long-term investments—is the most crucial valuation metric.

Buffett favors companies that generate more cash than necessary for their operational needs. Such companies can utilize free cash flow to reduce debt, distribute the cash to investors through dividends or buybacks, or reinvest in their operations.

The Pacer U.S. Cash Cows 100 ETF COWZ selects 100 US companies with strong cash flows and healthy balance sheets, from the Russell 1000 index. It has over $14.4 billion in assets. Chevron CVX and Marathon Oil MRO are its top holdings.

The VictoryShares Free Cash Flow ETF VFLO holds profitable large-cap companies that not only have high free cash flow yields but also favorable growth prospects.

The Global X U.S. Cash Flow Kings 100 ETF FLOW and the First Trust S&P 500 Diversified Free Cash Flow ETF FCFY are the newest entrants in the space.
Chevron Corporation (CVX): Free Stock Analysis Report

Marathon Oil Corporation (MRO): Free Stock Analysis Report

GLB-X US CF K1 (FLOW): ETF Research Reports

Pacer Us Cash Cows 100 ETF (COWZ): ETF Research Reports

VictoryShares Free Cash Flow ETF (VFLO): ETF Research Reports

FT-SP5 FR CA FL (FCFY): ETF Research Reports

To read this article on click here.

Zacks Investment Research

This article originally appeared on Zacks

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.