Alphabet & Chipotle Outshine Salesforce

Salesforce (CRM) is one of two cash-rich companies that excel at turning cash into shareholder value. However, the company's recent performance has raised concerns about its ability to allocate its cash effectively.

CRM's trailing 12-month free cash flow margin stands at 34.2%, but its average billings growth of 10.5% underwhelmed over the last year. Additionally, estimated sales growth of 10% for the next 12 months is considered soft and implies weaker demand.

In contrast, Alphabet (GOOGL) is a top pick due to its dominant Google Search engine, robust long-term revenue growth, and elite operating margin. GOOGL's profit margins have increased over time, speaking to its scale advantages and operating efficiency in both its core Search business and other subsidiaries like Google Cloud Platform and YouTube.

Chipotle (CMG) is another cash-producing company that excels at turning cash into shareholder value, with a rapidly increasing restaurant base, massive revenue base of $12.42 billion, and stellar returns on capital.