Marathon Petroleum, Kraft Heinz Look Good on Cash Flow
Posted: August 18, 2026
August 17, 2026 (Maple Hill Syndicate) – Companies’ upbeat press conferences can sometimes fool you. And reported earnings can sometimes be manipulated. One way to counteract those problems is to look at cash flow.
Cash flow is a measure of the actual cash flowing through a business. It differs from reported earnings by ignoring non-cash items such as depreciation and amortization.
“Ignoring,” in this case, means adding those items back to reported profits. Cash-flow analysts may also add back taxes and interest payments. The theory is that these things aren’t an intrinsic part of the business’s operation.
Personally, I believe that GAAP earnings – that is, earnings according to generally accepted accounting principles – are the best measure available. But it’s helpful to view companies through more than one lens.
Each year, I devote a column to companies that look good based on the ratio of their stock price to cash flow. Here are five that look appealing to me now.
Marathon Petroleum
Marathon Petroleum Corp. (MPC), based in Findlay, Ohio, operates 13 refineries, some pipelines, and more than 7,000 gas stations. In the past year, its profits have quadrupled and its stock has doubled. The stock is trading for six times cash flow.
Of course, the current worldwide shortage of gasoline won’t last forever. War has damaged refineries in Russia and the Middle East. No knows how the two wars will play out. For now, U.S. refiners are exporting a lot of gasoline and diesel fuel while continuing to supply the American market.
Kraft Heinz
Struggling in recent years, Kraft Heinz Co. (KHC) sells for only six times cash flow, and less than book value (corporate net worth per share). Profits have deteriorated as consumers put more emphasis on health and less on convenience.
But the Pittsburgh-based company still enjoys a big market for ketchup, macaroni and cheese, and dozens of other items. The company could use a tune-up. While you wait for it, you can enjoy a substantial dividend, with a dividend yield of more than 6%.
Met Life
While tech stocks have garnered all the headlines (and most of investors’ enthusiasm), MetLife Inc. has quietly gained more than 21% this year. It markets life insurance, annuities, dental insurance, and accident insurance.
More than a third of its revenue comes from group plans. Close to a quarter comes from Latin America and Asia. Analysts’ views are — as is often the case — paradoxical. Fourteen out of 20 analysts recommend it, yet their average one-year price target is only 2% above the stock’s present level.
MetLife shares change hands at about four times cash flow.
Miller Industries
Close to debt-free is Miller Industries Inc. (MLR), based in Ooltewah, Tennessee. It makes car carriers and tow trucks. If you think that’s not a growth industry, you’re right. And the past year was poor.
Yet longer-term, Miller’s record shines. It has shown a profit in 28 of the past 30 years. Its operating margin, though slim, has expanded recently. Only two Wall Street analysts deign to follow this stock, which languishes at five times cash flow.
Capital One
For a third year in a row, I recommend Capital One Financial Corp. (COF). It rose 52% in the first outing, and about 2% in the past year. Based in McLean, Virginia, this bank is one of the nation’s largest issuers of credit cards, and gets a big chunk of its revenue from credit-card interest.
Known for its café-like branch offices and for its catchy slogan (What’s in Your Wallet?), Capital One earned 1.57% on its assets in the past four quarters. I consider anything over 1.0% good. The main risk is a rise in credit-card delinquencies and defaults. The stock sells for about four times cash flow.
Performance
I’ve written 22 previous columns about stocks with favorable price-to-cash-flow ratios. The average one-year gain on my selections has been 14.4%. That beats the 11.1% average for the Standard & Poor’s 500 Total Return Index over the same 22 periods.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Of the 22 columns, 16 showed a profit and 11 beat the S&P 500.
My column a year ago showed a 9.9% gain, mainly because of a 49% gain in Murphy Oil Corp. (MUR). But that was far behind the S&P 500, which was up 21.7%. Two of my five picks declined, including a 16% loss in Comcast Corp. (MCCSA).
Disclosure: I own MetLife shares for one of my clients.
John Dorfman is chairman of Dorfman Value Investments in Boston. He can be reached at jdorfman@dorfmanvalue.com. He or his clients may own or trade stocks discussed in this column.