Wall Street ended April 23, 2026, on a dismal note, as U.S. stocks tumbled at the bourses after progress in U.S.-Iran peace talks stalled and oil prices rose for a straight fourth day. The U.S. equity market also showed signs of weakness yesterday as software heavyweights ServiceNow and IBM failed to boost investor confidence with their quarterly reports.

Against this backdrop, investors wary of high-beta volatility may consider pivoting toward low-leverage stalwarts. These fiscally conservative companies are better positioned to navigate interest rate fluctuations and geopolitical uncertainty. By providing a stable foundation in a shifting market, they can serve as a strategic hedge against a potential energy-driven economic slowdown.

We recommend low-leverage stocks, such as H World Group Limited (HTHT Quick QuoteHTHT - Free Report) , NVIDIA (NVDA Quick QuoteNVDA - Free Report) , FTI Consulting (FCN Quick QuoteFCN - Free Report) , HSBC Holdings (HSBC Quick QuoteHSBC - Free Report) and Stantec (STN Quick QuoteSTN - Free Report) .

Before selecting low-leverage stocks, it is important to understand what leverage is and how investing in low-leverage companies can benefit investors.

What’s the Significance of Low-Leverage Stocks?

In finance, leverage refers to the use of borrowed capital to support business operations and drive expansion. Companies typically raise such funds through debt financing, although equity financing remains an alternative. However, firms often prefer debt due to its relatively lower cost and easier availability compared with issuing equity.

Debt financing comes with inherent risks and is beneficial only when it generates returns that exceed the cost of borrowing. To limit downside risk, investors should be cautious of companies that rely excessively on debt. Ultimately, prudent investing involves selecting businesses with manageable leverage, as completely debt-free companies are rare.

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 deemed 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 first-quarter 2026 earnings in its first lap, investors should focus on stocks that have demonstrated solid earnings growth in recent periods.

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, we present our five picks out of the 18 stocks that made it through the screen.

H World Group Limited: It is a hotel management company. On March 18, 2026, the company reported its unaudited financial results for the fourth quarter and full year ended Dec. 31, 2025. In the fourth quarter, hotel GMV rose 18.4% year over year, while revenues from managed and franchised (M&F) hotels increased 21%.

The Zacks Consensus Estimate for HTHT’s 2026 sales indicates an improvement of 9.5% from the prior-year reported level. The stock boasts a long-term (three-to-five years) earnings growth rate of 19.10%. It currently sports a Zacks Rank #1.

NVIDIA: It is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit (GPU). On April 22, 2026,

NVIDIA announced that it is collaborating with Google Cloud to expand Google Cloud AI Hypercomputer for AI factories that will power the next frontier of agentic and physical AI. 

The Zacks Consensus Estimate for NVDA’s fiscal 2027 revenues indicates an improvement of 65.4% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 39.10%. NVDA currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FTI Consulting: It is a global business advisory firm aimed at helping organizations manage change, mitigate risk, and resolve financial, legal, operational, political, and regulatory, reputational, and transactional disputes. On April 22, 2026, FTI Consulting announced the expansion of its Health and Human Services practice with the appointment of three senior professionals in Australia. 

Against the backdrop of the Australian healthcare system facing rising demand, workforce constraints, and sustained funding pressures, FCN’s team will help clients navigate these challenges by scaling digital health, data-led care, and applied AI across clinical, operational, and administrative workflows.

The Zacks Consensus Estimate for FCN’s 2026 revenues indicates an improvement of 5.8% from the prior-year reported number. The Zacks Consensus Estimate for FCN’s 2026 earnings indicates an improvement of 5.3% from the prior-year reported actual. The stock currently carries a Zacks Rank #2.

HSBC Holdings: It is a major global banking and financial services firm. On March 23, 2026, the company announced David Rice’s appointment as HSBC’s first Chief AI Officer. The appointment came as part of HSBC’s wider focus on deploying AI at scale across the company by making generative AI tools available to all staff to simplify processes, procedures and policies, and equip customer-facing colleagues with the AI tools they need to deliver more personalized services.

The Zacks Consensus Estimate for HSBC’s 2026 revenues indicates an improvement of 5.9% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 12.3%. It currently carries a Zacks Rank #2.

Stantec: It provides professional consulting services in planning, engineering, architecture, interior design, landscape architecture, surveying, and geomatics. On April 21, 2026, the company released its 19th annual Sustainability Report, highlighting 68% of its gross revenues were sustainability-driven. The report also showcased that Stantec achieved global operational carbon neutrality for the fourth consecutive year, with continued progress toward net zero emissions under Canada’s Net Zero Challenge. 

The Zacks Consensus Estimate for STN’s 2026 revenues suggests an improvement of 12.5% from the year-ago reported level. The Zacks Consensus Estimate for STN’s 2026 earnings implies an improvement of 18.2% from the prior-year figure. It currently carries a Zacks Rank #2.