Salesforce Stock Delivers Strong Cash Yield – Upside Ahead?

Salesforce (CRM) could be a good pick for your portfolio, with its high cash yield, good fundamentals, and discounted valuation. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market

What Is Happening With CRM

CRM stock is currently trading at P/S (Price-to-Sales) ratio that is at a meaningful discount to its 3-month and 2-year highs, and also below its 3-year average.

The stock may not reflect it yet, but here is what’s going well for the company. Salesforce recently posted a Q3 FY2026 current remaining performance obligation (cRPO) of $29.4 billion, up 11% year-over-year, signaling a strong future revenue pipeline. Key products like Agentforce and Data 360 achieved nearly $1.4 billion in annual recurring revenue (ARR), up 114%, with Agentforce alone growing 330% in ARR and securing over 9,500 paid deals. The company raised its full-year FY2026 revenue guidance and operating cash flow outlook, demonstrating confidence from strong AI-driven product adoption and the Informatica acquisition.

CRM Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 6.0%, but Salesforce stock does
• Strong Margin: Last 12 month operating margin of 22.0%
• Growth: Last 12 revenue growth of 8.4% – low growth, but this selection is all about high yield and margin
• Valuation: CRM stock currently trading at 38% below 2Y high, 14% below 1M high, and at a PS lower than 3Y average.

Below is a quick comparison of CRM fundamentals with S&P medians.

*LTM: Last Twelve Months

But What Is The Risk Involved?

While CRM stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. Salesforce took a hit of about 70% during the Global Financial Crisis, 59% in the inflation shock, and 36% in the Covid pandemic. The 2018 correction wasn’t kind either, with the stock dropping nearly 25%. No matter how strong the company looks on paper, these dips show that even solid stocks can take big hits when the market turns. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read CRM Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

For more details and our view, see Buy or Sell CRM Stock.

Stocks Like CRM

Not ready to act on CRM? Consider these alternatives:

1. Adobe (ADBE)
2. RLI (RLI)
3. Teleflex (TFX)

We chose these stocks using the following criteria:

1. Greater than $2 Bil in market cap
2. Dipped last month & meaningfully below 2Y high
3. Current P/S < last few year average
4. Strong operating margin with no instances of large margin collapse
5. High free cash flow yield

A portfolio of stocks with the criteria above would have performed has follows since 12/31/2016:

• Average 6-month and 12-month forward returns of 10.4% and 20.4% respectively
• Win rate (percentage of picks returning positive) of about 74% for 12-month period
• Strategy consistent across market cycles

A Multi Asset Portfolio Gives You Safer Smarter Growth

Stocks can jump or crash but different assets move on different cycles. A multi asset portfolio helps you stay invested while cushioning swings in equities.

The asset allocation framework of Trefis’ Boston-based, wealth management partner yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Our partner’ strategy now includes Trefis High Quality Portfolio, which has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices