Strong Cash Yield: Is Gen Digital Stock A Buy?

Gen Digital (GEN) 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 GEN

GEN 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. Gen Digital recently delivered strong Q3 FY26 results, exceeding expectations and raising its full-year guidance for the third consecutive quarter. The Trust-Based Solutions segment, including MoneyLion, is a significant growth driver, and the company is actively integrating AI-powered offerings like the Gen Agent Trust Hub and Deepfake Guard to combat evolving digital threats. This platform strategy resonates with its broad user base, serving nearly 500 million users and adding approximately 1 million customers last quarter.

GEN Has Good Fundamentals

• Good Cash Yield: Not many stocks offer free cash flow yield of 11.5%, but Gen Digital stock does
• Strong Margin: Last 12 month operating margin of 37.3%
• Growth: Last 12 revenue growth of 21.5% – low growth, but this selection is all about high yield and margin
• Valuation: GEN stock currently trading at 32% below 2Y high, 15% below 1M high, and at a PS lower than 3Y average.

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

*LTM: Last Twelve Months

But What Is The Risk Involved?

While GEN stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. GEN took some serious hits in past crashes: 63% in the Dot-Com bubble, 56% during the Global Financial Crisis, and nearly 48% in the 2018 correction. The inflation shock saw it drop about 48% as well. Even the Covid selloff, which was sharper for many, still pushed GEN down nearly 25%. The stock has good fundamentals, but history shows it’s far from immune when the market turns south. 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 GEN 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 GEN Stock.

Stocks Like GEN

Not ready to act on GEN? Consider these alternatives:

1. Broadridge Financial Solutions (BR)
2. Zebra Technologies (ZBRA)
3. HealthEquity (HQY)

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

Portfolios Win When Stock Picks Fall Short

Individual stocks are unpredictable. A smart portfolio helps you invest, limits downside shocks, and provides upside exposure.

Beating the market consistently is hard, but the Trefis High Quality (HQ) Portfolio makes it look achievable. By selecting 30 high-conviction stocks, the HQ strategy has historically outpaced the S&P 500, S&P Mid-cap, and Russell 2000. See how this curated selection delivers superior risk-adjusted returns in our detailed performance factsheet.