We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
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.
Buy These 5 Low-Leverage Stocks as S&P 500 Touches Record Mark
Read MoreHide Full Article
Key Takeaways
Wall Street saw the S&P 500 touch 7,000 as the Fed held rates steady and cited solid economic expansion.
Low-leverage stocks are highlighted as safer options as record markets shift focus to balance-sheet strength.
Screened names include AA and FTI, selected for low debt levels, liquidity, and positive earnings trends.
Wall Street reached a historic milestone yesterday as the S&P 500 touched the 7,000 mark for the first time, fueled by the Federal Reserve’s decision to hold interest rates steady. Although the index ended the session little changed, investor confidence was supported by the central bank’s view that economic activity is “expanding at a solid pace.” Despite the pause in rate cuts, markets took comfort in Chairman Powell’s observation that the labor market is beginning to stabilize.
This backdrop is likely to reinforce the appeal of low-leverage safe havens, as the combination of a record-high market and steady interest rates might cause investors to favor financial resilience and capital preservation over aggressive expansion. So, we recommend companies, such as ThyssenKrupp (TKAMY - Free Report) , Alcoa Corp. (AA - Free Report) , Coeur Mining (CDE - Free Report) , FirstSun Capital Bancorp (FSUN - Free Report) and TechnipFMC (FTI - 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 financing 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 among the most widely used financial 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 fourth-quarter 2025 earnings season ongoing, investors should focus on 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 aforementioned factors, it would be 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.
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.
ThyssenKrupp: It is a steel production company. On Jan. 16, 2026, the company announced that the world’s leading non-profit environmental organization, CDP, had awarded ThyssenKrupp the top position in its prestigious climate ranking. With this result, ThyssenKrupp has once again secured a place on the annual Climate A List, making it one of only 877 companies internationally with this distinction.
The Zacks Consensus Estimate for TKAMY’s fiscal 2026 sales indicates an improvement of 2.1% from the prior-year reported actuals. The Zacks Consensus Estimate for TKAMY’s fiscal 2026 earnings indicates an improvement of 24.1% from the prior-year reported actuals. It currently sports a Zacks Rank #1.
Alcoa: It is one of the world's most sustainable aluminum producers. On Jan. 22, 2026, the company reported fourth-quarter 2025 results. Its revenues slipped 1.1% on a year-over-year basis; however, its adjusted earnings per share (EPS) surged 21.2%.
The Zacks Consensus Estimate for AA’s 2026 revenues indicates an improvement of 8.5% from the prior-year reported actuals. The Zacks Consensus Estimate for AA’s 2026 earnings indicates an improvement of 34% from the prior-year reported actuals. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coeur Mining: It is a precious metal mining company. On Dec. 8, 2025, the company provided an update on the 2025 exploration program at its Palmarejo gold-silver complex located in southwest Chihuahua, Mexico, which marks its largest exploration campaign since 2012 with approximately 68,000 meters of diamond drilling by 11 drill rigs across its extensive 300 km land package.
The Zacks Consensus Estimate for CDE’s 2026 revenues indicates an improvement of 30.2% from the prior-year estimated number. The Zacks Consensus Estimate for CDE’s 2026 earnings indicates an improvement of 116.9% from the prior-year expected figure. It currently sports a Zacks Rank #1.
FirstSun Capital Bancorp: It operates as the financial holding company for Sunflower Bank. On Jan. 26, 2026, the company released fourth-quarter fiscal 2025 results. Its adjusted EPS improved 10.5% year over year, while its return on average total assets was 1.17% compared with 1.09% in the prior quarter.
The Zacks Consensus Estimate for FSUN’s 2026 revenues indicates an improvement of 61.6% from the prior-year reported actuals. The Zacks Consensus Estimate for 2026 earnings indicates an improvement of 3.7% from the prior-year reported actuals. It currently sports a Zacks Rank #1.
TechnicFMC: It underwrites specialty insurance and reinsurance risks, principally in Bermuda and internationally. On Jan. 5, 2026, the company announced that it had been awarded a large integrated Engineering, Procurement, Construction, and Installation contract by BP for its greenfield Tiber development in the Gulf of America.
The Zacks Consensus Estimate for FTI’s 2026 revenues suggests an improvement of 9.6% from the year-ago estimated level. The stock boasts a long-term (three-to-five years) earnings growth rate of 18.8%. 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Buy These 5 Low-Leverage Stocks as S&P 500 Touches Record Mark
Key Takeaways
Wall Street reached a historic milestone yesterday as the S&P 500 touched the 7,000 mark for the first time, fueled by the Federal Reserve’s decision to hold interest rates steady. Although the index ended the session little changed, investor confidence was supported by the central bank’s view that economic activity is “expanding at a solid pace.” Despite the pause in rate cuts, markets took comfort in Chairman Powell’s observation that the labor market is beginning to stabilize.
This backdrop is likely to reinforce the appeal of low-leverage safe havens, as the combination of a record-high market and steady interest rates might cause investors to favor financial resilience and capital preservation over aggressive expansion. So, we recommend companies, such as ThyssenKrupp (TKAMY - Free Report) , Alcoa Corp. (AA - Free Report) , Coeur Mining (CDE - Free Report) , FirstSun Capital Bancorp (FSUN - Free Report) and TechnipFMC (FTI - 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 financing 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 among the most widely used financial 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 fourth-quarter 2025 earnings season ongoing, investors should focus on 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 aforementioned factors, it would be 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.
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.
ThyssenKrupp: It is a steel production company. On Jan. 16, 2026, the company announced that the world’s leading non-profit environmental organization, CDP, had awarded ThyssenKrupp the top position in its prestigious climate ranking. With this result, ThyssenKrupp has once again secured a place on the annual Climate A List, making it one of only 877 companies internationally with this distinction.
The Zacks Consensus Estimate for TKAMY’s fiscal 2026 sales indicates an improvement of 2.1% from the prior-year reported actuals. The Zacks Consensus Estimate for TKAMY’s fiscal 2026 earnings indicates an improvement of 24.1% from the prior-year reported actuals. It currently sports a Zacks Rank #1.
Alcoa: It is one of the world's most sustainable aluminum producers. On Jan. 22, 2026, the company reported fourth-quarter 2025 results. Its revenues slipped 1.1% on a year-over-year basis; however, its adjusted earnings per share (EPS) surged 21.2%.
The Zacks Consensus Estimate for AA’s 2026 revenues indicates an improvement of 8.5% from the prior-year reported actuals. The Zacks Consensus Estimate for AA’s 2026 earnings indicates an improvement of 34% from the prior-year reported actuals. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coeur Mining: It is a precious metal mining company. On Dec. 8, 2025, the company provided an update on the 2025 exploration program at its Palmarejo gold-silver complex located in southwest Chihuahua, Mexico, which marks its largest exploration campaign since 2012 with approximately 68,000 meters of diamond drilling by 11 drill rigs across its extensive 300 km land package.
The Zacks Consensus Estimate for CDE’s 2026 revenues indicates an improvement of 30.2% from the prior-year estimated number. The Zacks Consensus Estimate for CDE’s 2026 earnings indicates an improvement of 116.9% from the prior-year expected figure. It currently sports a Zacks Rank #1.
FirstSun Capital Bancorp: It operates as the financial holding company for Sunflower Bank. On Jan. 26, 2026, the company released fourth-quarter fiscal 2025 results. Its adjusted EPS improved 10.5% year over year, while its return on average total assets was 1.17% compared with 1.09% in the prior quarter.
The Zacks Consensus Estimate for FSUN’s 2026 revenues indicates an improvement of 61.6% from the prior-year reported actuals. The Zacks Consensus Estimate for 2026 earnings indicates an improvement of 3.7% from the prior-year reported actuals. It currently sports a Zacks Rank #1.
TechnicFMC: It underwrites specialty insurance and reinsurance risks, principally in Bermuda and internationally. On Jan. 5, 2026, the company announced that it had been awarded a large integrated Engineering, Procurement, Construction, and Installation contract by BP for its greenfield Tiber development in the Gulf of America.
The Zacks Consensus Estimate for FTI’s 2026 revenues suggests an improvement of 9.6% from the year-ago estimated level. The stock boasts a long-term (three-to-five years) earnings growth rate of 18.8%. 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.