In this article, we will take a look at some of the best cash-rich stocks that pay dividends.
With US stocks sitting at record highs while economic weakness begins to show, Morgan Stanley warned that the market could face trouble ahead. The firm advised its clients to focus on companies with strong cash reserves, as these businesses are better equipped to handle a downturn. Analysts explained that firms generating ample free cash flow — the money left after covering operating costs and capital spending — have the advantage of funding themselves without relying heavily on outside financing. Such excess funds can be used to expand operations, reduce debt, or support other initiatives. Morgan Stanley’s preference for these companies reflects growing concerns about signs of strain in the US economy.
Firms with strong cash reserves are in a better position to keep investing in their growth, even when market conditions turn challenging. For this, investors often turn to dividend stocks because these equities have a history of navigating market fluctuations.
Our Methodology
For this article, we began by using a stock screener to find companies with a price-to-free-cash-flow ratio below 15. From this list, we selected companies with a market capitalization of at least $10 billion. Next, we focused on companies with the highest trailing twelve-month operating cash flows, ranking the stocks in ascending order based on their TTM operating cash flows. We also considered hedge fund sentiment around each stock using Insider Monkey’s data for Q1 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Skyworks Solutions, Inc. (NYSE:SWKS)
Operating Cash Flow (TTM): $1.58 billion
Skyworks Solutions, Inc. (NYSE:SWKS) is a global semiconductor leader with innovative analog and mixed-signal semiconductors that enable wireless connectivity in smartphones, automotive, and industrial automation solutions. Its technologies open up applications such as 5G networks, edge Internet of Things (IoT) devices, and next-generation automotive communications.
Over the past several years, Skyworks Solutions, Inc. (NYSE:SWKS) has been focusing on four areas of priority: maintaining leadership by building innovation and R&D, mitigating risk from a concentrated base of top customers, growing in automotive, IoT, and industrial end markets, and streamlining supply chain operations. These are the areas of priority that still drive its performance and strategy, with continued focus on bringing new technologies to market and increasing its end markets.
Skyworks Solutions, Inc. (NYSE:SWKS) dividend policy also makes it an appealing option for income investors. On August 6, the firm announced a 1% increase in its quarterly dividend to $0.71 per share. The move was the 11th consecutive year that the firm had increased its dividend. The stock has a dividend yield of 3.57%, as of September 27.
9. Franklin Resources, Inc. (NYSE:BEN)
Operating Cash Flow (TTM): $1.64 billion
Franklin Resources, Inc. (NYSE:BEN) directs investment portfolios of equities, fixed income, alternatives, multi-asset solutions, and cash management. Its business model is defined by fees from management in terms of total AUM, which stood at $1.61 trillion in Q3 FY25.
Franklin Resources, Inc. (NYSE:BEN) is a solid dividend stock, and therefore, it is one of the best cash-rich stocks. The corporation pays a quarterly dividend of $0.32 a share and enjoys a current dividend yield of 5.50%, as of September 27. BEN has provided shareholders with growing dividends for 49 consecutive years.
Franklin Resources, Inc. (NYSE:BEN) has the benefit of scale, broad product offerings, and distribution capabilities around the world. It draws customer assets in the form of mutual funds, ETFs, separately managed accounts, and alternative strategies. Success drivers include maintaining gigantic-scale AUM, positioning products in line with shifting market trends, and integrating acquisitions like Putnam and Apera Asset Management effectively.
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