Invest in a Cash Cow for Long Term

INVESTOPEDIA EXPLAINS 'Cash Cow'

1. A cash cow requires little investment capital and perennially provides positive cash flows, which can be [1] allocated to other divisions within the corporation. These cash generators may also use their money to [2] buy back shares on the market or [3] pay dividends to shareholders.

2. This term is a metaphor for a dairy cow that produces milk over the course of its life and requires little maintenance. A dairy cow is an example of a cash cow, as after the initial capital outlay has been paid off, the animal continues to produce milk for many years to come.