In this article, we will take a look at some of the best cash-rich stocks to invest in.
US corporations may be leaving millions on the table based on how they manage their cash, according to research published by Clearwater Analytics in November. Beyond holding hard currency, companies typically invest excess cash in money market funds and short-term Treasury bills. The duration of those investments tends to vary based on operating needs and return goals.
Clearwater’s findings point to a clear difference in outcomes. Companies using a more dynamic cash allocation approach have earned an average annual return of 5.5% since 2023. Those that avoided frequent adjustments or active management earned about 3.5%. Over time, that gap becomes meaningful.
Data released by Clearwater in August showed that cash allocations at US corporations have fallen by half since 2021. Higher interest rates pushed firms toward higher-yielding Treasury bills, driving cash balances to the lowest level recorded in Clearwater’s system in at least eight years. When very short-term Treasury bills are excluded, the shift is even more pronounced. Median allocations to US Treasuries jumped from 3% to 20% over the same period. Many companies appear to be prioritizing yield over idle cash.
In September, Morgan Stanley advised clients to focus on companies with strong cash reserves, noting that these firms are better positioned to weather an economic downturn. Analysts pointed to free cash flow as a key advantage. Companies that generate cash after covering operating costs and capital spending can fund growth internally, reduce debt, or support other initiatives without relying heavily on outside financing. That preference reflects rising concern about signs of strain across the US economy.
Given this, we will take a look at some of the best cash-rich stocks to invest in.
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 Q3 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 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Toll Brothers, Inc. (NYSE:TOL)
Operating Cash Flow (TTM): $1.1 Billion
Number of Hedge Fund Holders: 51
Toll Brothers, Inc. (NYSE:TOL) is among the best cash-rich stocks to invest in.
On December 12, JPMorgan lowered its price target on Toll Brothers, Inc. (NYSE:TOL) to $141 from $161 and kept an Overweight rating after the earnings report. In a research note, the analyst pointed to fiscal 2026 closings and gross margin guidance that came in below estimates. The firm trimmed its forecasts but maintained a relative buy view on the stock.
For fiscal Q4 2025, Toll Brothers exceeded expectations on quarterly orders. At the same time, full-year guidance for 2026 landed below what the market was looking for. The company reported 2,598 signed contracts for the three months through October, according to a statement released after Monday’s close. Analysts surveyed by Bloomberg had expected 2,475.
Toll Brothers, Inc. (NYSE:TOL) also said it expects to deliver between 10,300 and 10,700 homes in fiscal 2026. Bloomberg’s consensus estimate stood at 10,843.
CEO Doug Yearley said the results show the company’s luxury business remains differentiated, as it serves a more affluent buyer who feels less pressure from affordability challenges. More customers chose to trade up to a new home, even when that meant selling an existing property and giving up a lower mortgage rate. The decline in rates during the quarter, from nearly 7% to below 6.3%, helped support demand. Builders, including Toll, have leaned more on incentives such as mortgage rate buydowns to bring buyers off the sidelines.
Toll Brothers, Inc. (NYSE:TOL) builds, markets, and finances residential and commercial properties across the United States.
9. DocuSign, Inc. (NASDAQ:DOCU)
Operating Cash Flow (TTM): $1.1 Billion
Number of Hedge Fund Holders: 60
DocuSign, Inc. (NASDAQ:DOCU) is among the best cash-rich stocks to invest in.
On December 17, BTIG analyst Allan Verkhovski initiated coverage of DocuSign, Inc. (NASDAQ:DOCU) with a Buy rating and an $88 price target. Shares are down 34% from their multi-year high of $107 last December, following what the analyst described as a very “noisy” year. In a research note, he said factors such as the rollout of the DocuGPT agent and the company’s shift to guiding on annual ARR instead of billings, starting next quarter, weighed on the stock. BTIG sees that backdrop as a “great” buying opportunity.
In the third quarter of 2025, the company posted one of its strongest growth quarters over the past two years. Results were driven by steady customer spending on core products and the Intelligent Agreement Management platform, known as IAM. Revenue reached $818 million, up 8% year over year, and billings totaled $829 million, while non-GAAP operating margin came in at 31%. Free cash flow rose to $263 million, which supported a $215 million share repurchase. That marked DocuSign, Inc. (NASDAQ:DOCU)’s largest quarterly buyback to date.
Allan Thygesen, President, CEO & Director, pointed to consistent execution across three strategic priorities. These include meeting demand for IAM and eSignature through an improved go-to-market approach, accelerating platform development and AI innovation, and pushing for higher operational efficiency.
By the end of Q3, more than 25,000 customers had adopted IAM, up from over 10,000 in April. Management expects IAM to account for a low double-digit share of recurring revenue by year-end. IAM is now integrated with platforms such as ChatGPT, Anthropic Claude, Gemini Enterprise, and others. During the quarter, IAM also achieved FedRAMP Moderate and GovRAMP authorization.
DocuSign, Inc. (NASDAQ:DOCU) is a cloud-based platform that allows users to send, sign, and manage legally binding electronic agreements and documents from any device, reducing the need for paper, printing, and scanning.
