We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Low-Leverage Stocks for Risk-Averse Investors to Buy
The U.S. equity futures rose in the early hours of Feb 21, even while the U.S. stock market was closed due to President’s Day, thanks to a rumor of a summit on Ukraine between America and Ukraine. However, this gain was momentary, as it was soon confirmed that no such summit was taking place.
Such an event shows how volatile the equity market can be at times and as an investor if you don’t want to lose big time, we suggest you invest in stocks like Valero Energy, STMicroelectronics, Western Midstream Partners, Chevron and Atmos Energy which bear low leverage and are hence are less risky.
Now one must understand that you cannot totally avoid risk while investing in the stock market but of course you can minimize it and there comes the concept of choosing a low leverage stock. But first, one should be aware of what leverage means.
Leverage is a well-known strategy in corporate finance, which refers to the use of borrowed capital by companies in their business operations. Although this borrowing can be done through equity or debt financing, statistically it has been observed that debt financing is being preferred over equity by the majority of corporations.
This preference is probably due to the cheap and easy availability of debt over equity financing.
However, at times debt financing can be detrimental for a company’s prospects, especially when a company bears too much debt compared to its assets. So, one should look for stocks that are not heavily burdened with debt. So, the next step should be how to identify such stocks that are not overburdened with debt as a debt-free stock is almost impossible to find.
To identify such stocks, historically several leverage ratios have been developed to measure the amount of debt a company bears and the debt-to-equity ratio is one of the most common ratios.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Zacks.com featured highlights include Valero Energy, STMicroelectronics, Western Midstream Partners, Chevron and Atmos Energy
For Immediate Release
Chicago, IL – February 23, 2022 – Stocks in this week’s article are Valero Energy (VLO - Free Report) , STMicroelectronics (STM - Free Report) , Western Midstream Partners (WES - Free Report) , Chevron (CVX - Free Report) and Atmos Energy (ATO - Free Report) .
5 Low-Leverage Stocks for Risk-Averse Investors to Buy
The U.S. equity futures rose in the early hours of Feb 21, even while the U.S. stock market was closed due to President’s Day, thanks to a rumor of a summit on Ukraine between America and Ukraine. However, this gain was momentary, as it was soon confirmed that no such summit was taking place.
Such an event shows how volatile the equity market can be at times and as an investor if you don’t want to lose big time, we suggest you invest in stocks like Valero Energy, STMicroelectronics, Western Midstream Partners, Chevron and Atmos Energy which bear low leverage and are hence are less risky.
Now one must understand that you cannot totally avoid risk while investing in the stock market but of course you can minimize it and there comes the concept of choosing a low leverage stock. But first, one should be aware of what leverage means.
Leverage is a well-known strategy in corporate finance, which refers to the use of borrowed capital by companies in their business operations. Although this borrowing can be done through equity or debt financing, statistically it has been observed that debt financing is being preferred over equity by the majority of corporations.
This preference is probably due to the cheap and easy availability of debt over equity financing.
However, at times debt financing can be detrimental for a company’s prospects, especially when a company bears too much debt compared to its assets. So, one should look for stocks that are not heavily burdened with debt.
So, the next step should be how to identify such stocks that are not overburdened with debt as a debt-free stock is almost impossible to find.
To identify such stocks, historically several leverage ratios have been developed to measure the amount of debt a company bears and the debt-to-equity ratio is one of the most common ratios.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/1871048/5-low-leverage-stocks-that-risk-averse-investors-may-buy
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Follow us on Twitter: https://www.twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.