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5 Low-Leverage Stocks to Bet on as Investors Shy Away From Technology
Read MoreHide Full Article
Key Takeaways
Investors favor low-leverage stocks as markets hit records and tech sentiment weakens.
CASY, HG and others show solid earnings momentum while maintaining lower debt burdens.
The screening is focused on leverage, earnings growth, volume, and price levels.
Most of the U.S. stock indices ended Dec. 11, 2025, in the green, with the S&P 500 and Dow Jones Industrial Average hitting fresh closing records (as reported by CNBC). This optimism in the equity market came after the U.S. central bank reduced the nation’s interest rate by a quarter point on Dec. 10, with investors seen shying away from tech stocks and investing in equities sensitive to rate cuts.
Amid this background, investors might want to look for safe-haven securities rather than high-growth tech stocks, as the hype surrounding overvalued AI-centric tech stocks still remains a major point of concern for many investors. To this end, we recommend companies such as Casey’s General Stores (CASY - Free Report) , Hamilton Insurance Group (HG - Free Report) , Northrip Bancorp (NRIM - Free Report) , REV Group (REVG - Free Report) and Engie (ENGIY - Free Report) . These stocks carry low leverage and, therefore, may offer a safer option for investors seeking stability during periods of market turmoil.
Now, before selecting low-leverage stocks, let’s explore what leverage is and how choosing a low-leverage stock can help investors.
What’s the Significance of Low-Leverage Stocks?
In finance, leverage refers to the practice of borrowing capital to help companies run their operations smoothly and expand their business. Such borrowings are done through debt financing. But there remains an option for equity finance. This is probably due to the cheap and easy availability of debt over equity financing.
However, debt financing has its share of drawbacks. Particularly, it is desirable only as long as it successfully generates a higher rate of return compared to the interest rate. To avoid considerable losses in your portfolio, it is advisable to avoid companies that rely excessively on debt financing.
The crux of safe investment lies in choosing a company that is not burdened with debt, as a debt-free stock is almost impossible to find.
The equity market can be volatile at times. As an investor, if you want to avoid significant losses, we suggest focusing on stocks with low leverage, which are generally less risky.
To identify such stocks, several leverage ratios have historically been developed to measure the amount of debt a company carries. The debt-to-equity ratio is one of the most common of these ratios.
Analyzing Debt/Equity
Debt-to-Equity Ratio = Total Liabilities/Shareholders’ Equity
This metric is a liquidity ratio that indicates the amount of financial risk a company bears. A lower debt-to-equity ratio reflects improved solvency for a company.
With the third-quarter 2025 earnings season almost in its last lap, investors should be eyeing stocks that have demonstrated solid earnings growth in recent periods.
However, if a stock carries a high debt-to-equity ratio during an economic downturn, its seemingly strong earnings could quickly turn into a nightmare.
The Winning Strategy
Considering the factors above, it is prudent to choose stocks with a low debt-to-equity ratio to ensure steady returns.
Yet, an investment strategy based solely on the debt-to-equity ratio might not fetch the desired outcome. To select stocks with the potential to provide steady returns, we have expanded our screening criteria to include additional factors.
Here are the other parameters:
Debt/Equity less than X-Industry Median: Stocks that are less leveraged than their industry peers.
Current Price greater than or equal to 10: The stocks must be trading at a minimum of $10 or above.
Average 20-day Volume greater than or equal to 50000: A substantial trading volume ensures that the stock is easily tradable.
Percentage Change in EPS F(0)/F(-1) greater than X-Industry Median: Earnings growth adds to optimism, leading to a stock’s price appreciation.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential.
Estimated One-Year EPS Growth F(1)/F(0) greater than 5: This shows earnings growth expectations.
Zacks Rank #1 or 2: Irrespective of market conditions, stocks with a Zacks Rank #1 or 2 have a proven history of success.
Excluding stocks that have a negative or a zero debt-to-equity ratio, here we present our five picks out of the 15 stocks that made it through the screen.
Casey’s General Stores: It is a chain of convenience stores that offers a comprehensive range of products and services to meet the needs of its customers. On Dec. 9, 2025, the company released its second-quarter fiscal 2026 results. Its inside same-store sales increased 3.3% year over year, whereas its earnings went up 14%.
The Zacks Consensus Estimate for Casey’s fiscal 2026 revenues suggests an improvement of 9.6% from the year-ago fiscal’s reported level. The Zacks Consensus Estimate for CASY’s fiscal 2026 earnings suggests an improvement of 11.8% from the year-ago fiscal’s reported level. It currently has a Zacks Rank #2.
Hamilton InsuranceGroup: It underwrites specialty insurance and reinsurance risks principally in Bermuda and internationally. On Nov. 4, 2025, the company released its third-quarter 2025 results. Its net premiums increased 16.5% from the year-ago quarter’s reported number, whereas its operating earnings of $1.20 per share recorded a massive improvement from 16 cents per share reported in the third quarter of 2024.
The Zacks Consensus Estimate for HG’s 2025 revenues suggests an improvement of 20.9% from the year-ago quarter’s level. The Zacks Consensus Estimate for its 2025 earnings implies an improvement of 8.5% from the year-ago quarter’s level. It currently sports a Zacks Rank #1.
Northrip Bancorp.: It is a full-service commercial bank that provides a full range of personal and business banking services. On Nov. 26, 2025, the company announced the completion of its private placement of $60.0 million in aggregate principal amount of 6.875% Fixed-to-Floating Rate Subordinated Notes due 2035 (the “Notes”) to certain qualified institutional buyers and institutional accredited investors. NRIM intends to use the net proceeds from the private placement for general corporate purposes and to support regulatory capital ratios for growth initiatives.
The Zacks Consensus Estimate for NRIM’s 2025 revenues suggests an improvement of 29.6% from the year-ago quarter’s level. The Zacks Consensus Estimate for 2025 earnings implies an improvement of 51.5% from the year-ago quarter’s level. It currently sports a Zacks Rank #1.
REV Group: It designs, manufactures and distributes specialty vehicles, and related aftermarket parts and services. On Dec. 10, 2025, the company announced its fourth-quarter fiscal 2025 results. Excluding the impact of the Bus Manufacturing Businesses, its net sales increased 13% compared to the prior year quarter. Its adjusted EPS of 83 cents improved a solid 62.7% year over year.
The Zacks Consensus Estimate for REVG’s fiscal 2026 sales suggests a year-over-year improvement of 7.3%. The Zacks Consensus Estimate for REVG’s fiscal 2026 earnings suggests a year-over-year improvement of 30.4%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Engie: It engages in the power, natural gas, and energy services businesses. On Nov. 24, 2025, Engie announced the financial closure for its first offshore wind farm off the coast of Poland. Located in the Polish Exclusive Economic Zone of the Baltic Sea, approximately 23 kilometers north of the coastline, the wind farm will comprise 26 turbines with a capacity of 14 MW each, equipped with the Power Boost feature that increases output to 15 MW, for a total planned capacity of up to 390 MW.
The Zacks Consensus Estimate for ENGIY’s 2025 earnings indicates an improvement of 31.8% from the prior-year reported actuals. It currently carries a Zacks Rank #2.
You can get the remaining stocks on this list by signing up now for your two-week free trial to the Research Wizard and start using this screen in your trading. Further, you can create your strategies and backtest them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
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.
Image: Bigstock
5 Low-Leverage Stocks to Bet on as Investors Shy Away From Technology
Key Takeaways
Most of the U.S. stock indices ended Dec. 11, 2025, in the green, with the S&P 500 and Dow Jones Industrial Average hitting fresh closing records (as reported by CNBC). This optimism in the equity market came after the U.S. central bank reduced the nation’s interest rate by a quarter point on Dec. 10, with investors seen shying away from tech stocks and investing in equities sensitive to rate cuts.
Amid this background, investors might want to look for safe-haven securities rather than high-growth tech stocks, as the hype surrounding overvalued AI-centric tech stocks still remains a major point of concern for many investors. To this end, we recommend companies such as Casey’s General Stores (CASY - Free Report) , Hamilton Insurance Group (HG - Free Report) , Northrip Bancorp (NRIM - Free Report) , REV Group (REVG - Free Report) and Engie (ENGIY - Free Report) . These stocks carry low leverage and, therefore, may offer a safer option for investors seeking stability during periods of market turmoil.
Now, before selecting low-leverage stocks, let’s explore what leverage is and how choosing a low-leverage stock can help investors.
What’s the Significance of Low-Leverage Stocks?
In finance, leverage refers to the practice of borrowing capital to help companies run their operations smoothly and expand their business. Such borrowings are done through debt financing. But there remains an option for equity finance. This is probably due to the cheap and easy availability of debt over equity financing.
However, debt financing has its share of drawbacks. Particularly, it is desirable only as long as it successfully generates a higher rate of return compared to the interest rate. To avoid considerable losses in your portfolio, it is advisable to avoid companies that rely excessively on debt financing.
The crux of safe investment lies in choosing a company that is not burdened with debt, as a debt-free stock is almost impossible to find.
The equity market can be volatile at times. As an investor, if you want to avoid significant losses, we suggest focusing on stocks with low leverage, which are generally less risky.
To identify such stocks, several leverage ratios have historically been developed to measure the amount of debt a company carries. The debt-to-equity ratio is one of the most common of these ratios.
Analyzing Debt/Equity
Debt-to-Equity Ratio = Total Liabilities/Shareholders’ Equity
This metric is a liquidity ratio that indicates the amount of financial risk a company bears. A lower debt-to-equity ratio reflects improved solvency for a company.
With the third-quarter 2025 earnings season almost in its last lap, investors should be eyeing stocks that have demonstrated solid earnings growth in recent periods.
However, if a stock carries a high debt-to-equity ratio during an economic downturn, its seemingly strong earnings could quickly turn into a nightmare.
The Winning Strategy
Considering the factors above, it is prudent to choose stocks with a low debt-to-equity ratio to ensure steady returns.
Yet, an investment strategy based solely on the debt-to-equity ratio might not fetch the desired outcome. To select stocks with the potential to provide steady returns, we have expanded our screening criteria to include additional factors.
Here are the other parameters:
Debt/Equity less than X-Industry Median: Stocks that are less leveraged than their industry peers.
Current Price greater than or equal to 10: The stocks must be trading at a minimum of $10 or above.
Average 20-day Volume greater than or equal to 50000: A substantial trading volume ensures that the stock is easily tradable.
Percentage Change in EPS F(0)/F(-1) greater than X-Industry Median: Earnings growth adds to optimism, leading to a stock’s price appreciation.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2 (Buy), offer the best upside potential.
Estimated One-Year EPS Growth F(1)/F(0) greater than 5: This shows earnings growth expectations.
Zacks Rank #1 or 2: Irrespective of market conditions, stocks with a Zacks Rank #1 or 2 have a proven history of success.
Excluding stocks that have a negative or a zero debt-to-equity ratio, here we present our five picks out of the 15 stocks that made it through the screen.
Casey’s General Stores: It is a chain of convenience stores that offers a comprehensive range of products and services to meet the needs of its customers. On Dec. 9, 2025, the company released its second-quarter fiscal 2026 results. Its inside same-store sales increased 3.3% year over year, whereas its earnings went up 14%.
The Zacks Consensus Estimate for Casey’s fiscal 2026 revenues suggests an improvement of 9.6% from the year-ago fiscal’s reported level. The Zacks Consensus Estimate for CASY’s fiscal 2026 earnings suggests an improvement of 11.8% from the year-ago fiscal’s reported level. It currently has a Zacks Rank #2.
Hamilton Insurance Group: It underwrites specialty insurance and reinsurance risks principally in Bermuda and internationally. On Nov. 4, 2025, the company released its third-quarter 2025 results. Its net premiums increased 16.5% from the year-ago quarter’s reported number, whereas its operating earnings of $1.20 per share recorded a massive improvement from 16 cents per share reported in the third quarter of 2024.
The Zacks Consensus Estimate for HG’s 2025 revenues suggests an improvement of 20.9% from the year-ago quarter’s level. The Zacks Consensus Estimate for its 2025 earnings implies an improvement of 8.5% from the year-ago quarter’s level. It currently sports a Zacks Rank #1.
Northrip Bancorp.: It is a full-service commercial bank that provides a full range of personal and business banking services. On Nov. 26, 2025, the company announced the completion of its private placement of $60.0 million in aggregate principal amount of 6.875% Fixed-to-Floating Rate Subordinated Notes due 2035 (the “Notes”) to certain qualified institutional buyers and institutional accredited investors. NRIM intends to use the net proceeds from the private placement for general corporate purposes and to support regulatory capital ratios for growth initiatives.
The Zacks Consensus Estimate for NRIM’s 2025 revenues suggests an improvement of 29.6% from the year-ago quarter’s level. The Zacks Consensus Estimate for 2025 earnings implies an improvement of 51.5% from the year-ago quarter’s level. It currently sports a Zacks Rank #1.
REV Group: It designs, manufactures and distributes specialty vehicles, and related aftermarket parts and services. On Dec. 10, 2025, the company announced its fourth-quarter fiscal 2025 results. Excluding the impact of the Bus Manufacturing Businesses, its net sales increased 13% compared to the prior year quarter. Its adjusted EPS of 83 cents improved a solid 62.7% year over year.
The Zacks Consensus Estimate for REVG’s fiscal 2026 sales suggests a year-over-year improvement of 7.3%. The Zacks Consensus Estimate for REVG’s fiscal 2026 earnings suggests a year-over-year improvement of 30.4%. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Engie: It engages in the power, natural gas, and energy services businesses. On Nov. 24, 2025, Engie announced the financial closure for its first offshore wind farm off the coast of Poland. Located in the Polish Exclusive Economic Zone of the Baltic Sea, approximately 23 kilometers north of the coastline, the wind farm will comprise 26 turbines with a capacity of 14 MW each, equipped with the Power Boost feature that increases output to 15 MW, for a total planned capacity of up to 390 MW.
The Zacks Consensus Estimate for ENGIY’s 2025 earnings indicates an improvement of 31.8% from the prior-year reported actuals. It currently carries a Zacks Rank #2.
You can get the remaining stocks on this list by signing up now for your two-week free trial to the Research Wizard and start using this screen in your trading.
Further, you can create your strategies and backtest them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today.
And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
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.
Disclosure: Performance information for Zacks’ portfolios and strategies is available at: https://www.zacks.com/performance.