Block's $3.2B FCF and Two Other Forever Stocks

The pitch is simple: buy a company with durable cash flows, hold it through cycles, and let compounding do the work. Three stocks in a recent InvestorPlace article by Eric Fry carry that label. Block Inc. (XYZ), Royalty Pharma Plc (RPRX), and Equinor ASA (EQNR) each have a claim to the "forever stock" title. The numbers behind that claim deserve a closer look.

Block, the fintech parent of Square, crossed a threshold. It processes over $200 billion in annual transaction volume. Its point-of-sale terminals sit in farmers markets and national chains. After years of heavy capital spending and acquisitions, the company is throwing off cash. Free cash flow reached $3.2 billion by March 31, up 172% from the same period a year earlier. That is not a growth story anymore. That is a cash generation story. The reinvestment phase appears to be fading. The harvest phase is beginning. The question is whether Block can sustain that pace. The company's Alpha Score sits at 54 out of 100, a Mixed label. The proprietary data does not scream buy. It says the business is established and the cash flow is real. The entry price will determine whether the compounding works.

Royalty Pharma takes a different route. Instead of developing drugs, it buys the rights to future sales of approved and pipeline drugs. The model carries high margins because it avoids the R&D cost load of a traditional biotech. No labs. No clinical trial failures. No write-offs on failed compounds. Since its 2020 IPO, the company has acquired royalties on more than 35 commercial products and 17 development-stage candidates. The risk is deal flow. The pool of approved drugs generating significant sales is finite. Competition for the best assets is real. Royalty Pharma's Alpha Score is 42 out of 100, also Mixed. The margin structure is attractive. The sustainability of the acquisition pipeline is the unknown.

Equinor is the most situational of the three. Norway's state-controlled energy company is Europe's largest non-Russian supplier of natural gas. That used to be a geographic footnote. After Russia invaded Ukraine, it became a geopolitical asset. European countries have been phasing out Russian oil and gas. The replacement supply comes from Norway. Equinor benefits directly. It does not need to discover new fields or pioneer new technology. It needs to keep producing and delivering gas that Europe now trusts. The conflict in Iran is accelerating that trend. The risk is commodity price. Equinor is an oil and gas producer. If Brent crude falls to $40, cash flow falls with it. The geopolitical premium works today. That can reverse. Equinor's Alpha Score is 51 out of 100, Mixed.

All three stocks carry a Mixed label on AlphaScala's scoring system. None are screaming buys on the proprietary data. They are established businesses with identifiable cash flows. The "forever stock" thesis works when you pay a reasonable price and hold through the cycles. The current entry price will decide whether the compounding has room to work.

For more context on how these stocks fit into a broader portfolio, see our stock market analysis. For detailed profiles, visit the XYZ stock page and EQNR stock page.