S&P 500 companies have never held more cash than they do today. Microsoft, Cisco Systems, Google and Apple together sit on more than $128 billion in cash and short-term investments. More than two-thirds of countries don't make that much in a year, counting wages and profits for all of their citizens and companies.

Such hoarding generally serves stock investors poorly. They should receive larger dividends, but instead they are left to hope that before the money is wasted it's spent on something that results in a higher share price. However, at the moment, mountains of cash might give confidence to investors who fear another sharp market decline. In a downturn, companies can use cash reserves to snap up struggling competitors on the cheap, or to repurchase their own shares.

The three companies below aren't nearly as dominant as the aforementioned ones, and two are struggling to compete with them. What they have going for them is that their cash reserves are huge when calculated as a percentage of their stock market values, and that they're adding to them by generating abundant free cash from operations. Whether all that financial firepower will be put to good use is unknown, but turnarounds are surely easier when companies can fund them properly without taking on excessive debt.

Dell

Net cash (including short-term investments) / Market value: 30%
Free cash flow / Market value: 13%

Dell turns only about a nickel of each sales dollar into operating profit, versus a dime for Hewlett-Packard (HPQ) and nearly 30 cents for Apple. Moreover, Dell's consumer products earn the company next to nothing; most of its meager profit comes from higher-margin sales to businesses and institutions. Management recently outlined to Wall Street analysts a plan to increase consumer margins by selling more preconfigured machines and transporting a larger percentage of notebooks cheaply by sea. Business sales look likely to grow as a percentage of total sales, as companies that skimped on technology spending refresh their aging computer networks. The result could be a 7% operating margin within a year or two. That might seem like a modest improvement, but shares at less than 10 times earnings could get a lift from even a trickle of good news.

Motorola

Net cash / Market value: 32%
Free cash flow / Market value: 12%

Motorola shares briefly sold for more than $50 at the peak of the dot-com stock bubble. Today they fetch just $6 and change. The company's cellphone business has lost money for years, and its market share has plunged to about 3% from a peak of over 20%. Its big-screen Droid model is selling well enough in the current smartphone era, but it's by no means as popular as the company's clamshell RAZR was in its day. Motorola is putting together an ambitious turnaround plan, The Wall Street Journal recently reported. It involves splitting the company into a cash-rich cellphone and cable box company that's badly in need of a profit boost, and a lucrative specialty radio and telecom equipment company that can generate its own cash. For now, Motorola is using cash to reduce debt. Shares sell for about 17 times this year's earnings estimate, but early forecasts call for the company's earnings to jump 38% next year.

Forest Laboratories

Net cash / Market value: 39%
Free cash flow / Market value: 12%

Forest Laboratories shares have lost more than 60% since peaking six years ago. As things stand now, the company's sales are expected to plunge beginning in 2012 because of patent expirations, especially for blockbusters Lexapro (for depression) and Namenda (for Alzheimer's). According to estimates from investment bank Duncan Williams, even after adding sales for products now in late-stage development, total 2014 sales will likely be 30% below this year's level. Then again, shares seem to already reflect that expectation. They sell for less than eight times this year's profit forecast. By the time Forest reaches its patent cliff, it could have a cash war chest equal to 60% of today's stock market value.