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5 Low-Leverage Stocks to Buy as US Strikes Iran in Self-Defense
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Key Takeaways
Low-leverage stocks may offer stability as geopolitical tensions and oil volatility persist.
Siemens Energy hit a record high in orders, led by Gas Services and Grid Technologies.
RB Global completed the Big Iron acquisition to expand deeper into the U.S. agriculture market.
The major U.S. stock indices climbed less than 1% on May 22, 2026, reflecting investors’ optimism as secretary of State Marco Rubio and Iranian media signaled progress on negotiations between the United States and Iran for a peace deal. However, Wall Street remains on a volatile edge as fluctuating oil prices amid the peace talks continued to rattle the global equity market.
With the U.S. military having recently conducted "self-defense strikes" targeting vessels in southern Iran, there remains a chance of a fresh conflict in the Middle East.
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.
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 to 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. 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 suggests improved solvency for a company.
With the first-quarter 2026 earnings season in its last 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 $10 or higher.
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 11 that made it through the screen.
Pennant Group: It offers home health, hospice and senior living services. On May 6, 2026, the company reported first-quarter 2026 results. Total revenues improved 36% to $285.4 million, while its adjusted earnings per share (EPS) surged 18.5% to 32 cents.
The Zacks Consensus Estimate for PNTG’s 2026 sales indicates an improvement of 23.3% from the prior-year reported level. The stock boasts a long-term (three-to-five years) earnings growth rate of 13%. It currently holds a Zacks Rank #2.
Siemens Energy: It focuses on the design, development, manufacture and supply of products, installation and technologically advanced services principally in the renewable energy sector. On May 12, 2026, the company announced its second-quarter fiscal 2026 results. Notably, Siemens Energy achieved a new all time high in orders driven by another record level of orders at Gas Services and a sharp increase in Grid Technologies year-over-year.
The Zacks Consensus Estimate for SMERY’s fiscal 2026 revenues indicates an improvement of 19% from the prior-year reported actuals. The stock boasts an average four-quarter earnings surprise of 72.46%. SMERY currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Valero Energy: It is the largest independent refiner and marketer of petroleum products in the United States. On April 30, 2026, the company announced first-quarter 2026 results. Its revenues improved 7% year over year to $32.4 million, while its adjusted EPS grew a massive 374.2% to $4.22.
The Zacks Consensus Estimate for VLO’s 2026 revenues indicates an improvement of 8.6% from the prior-year reported number. The stock delivered a trailing four-quarter average earnings surprise of 25.60% and currently sports a Zacks Rank #1.
RB Global: It is an omnichannel marketplace that provides value-added insights, services and transaction solutions for buyers and sellers of commercial assets and vehicles. On May 18, 2026, RB Global announced that it has completed the acquisition of Big Iron Auction Company, accelerating its strategic expansion into the U.S. agriculture market.
The Zacks Consensus Estimate for RBA’s 2026 revenues indicates an improvement of 6.7% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 15.40%. It currently carries a Zacks Rank #2.
Kirby: It is the largest domestic tank barge operator in the United States. On April 30, 2026, the company released its first-quarter 2026 results. Its revenues rose 7.4% year over year to $844 million, while EPS grew 13% to $1.50.
The Zacks Consensus Estimate for KEX’s 2026 revenues suggests an improvement of 2.3% from the year-ago reported level. The stock boasts a long-term earnings growth rate of 13.90%. It currently carries a Zacks Rank #2.
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5 Low-Leverage Stocks to Buy as US Strikes Iran in Self-Defense
Key Takeaways
The major U.S. stock indices climbed less than 1% on May 22, 2026, reflecting investors’ optimism as secretary of State Marco Rubio and Iranian media signaled progress on negotiations between the United States and Iran for a peace deal. However, Wall Street remains on a volatile edge as fluctuating oil prices amid the peace talks continued to rattle the global equity market.
With the U.S. military having recently conducted "self-defense strikes" targeting vessels in southern Iran, there remains a chance of a fresh conflict in the Middle East.
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 The Pennant Group (PNTG - Free Report) , Siemens Energy (SMERY - Free Report) , Valero Energy (VLO - Free Report) , RB Global (RBA - Free Report) and Kirby Corp. (KEX - 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 to 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. 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 suggests improved solvency for a company.
With the first-quarter 2026 earnings season in its last 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 $10 or higher.
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 11 that made it through the screen.
Pennant Group: It offers home health, hospice and senior living services. On May 6, 2026, the company reported first-quarter 2026 results. Total revenues improved 36% to $285.4 million, while its adjusted earnings per share (EPS) surged 18.5% to 32 cents.
The Zacks Consensus Estimate for PNTG’s 2026 sales indicates an improvement of 23.3% from the prior-year reported level. The stock boasts a long-term (three-to-five years) earnings growth rate of 13%. It currently holds a Zacks Rank #2.
Siemens Energy: It focuses on the design, development, manufacture and supply of products, installation and technologically advanced services principally in the renewable energy sector. On May 12, 2026, the company announced its second-quarter fiscal 2026 results. Notably, Siemens Energy achieved a new all time high in orders driven by another record level of orders at Gas Services and a sharp increase in Grid Technologies year-over-year.
The Zacks Consensus Estimate for SMERY’s fiscal 2026 revenues indicates an improvement of 19% from the prior-year reported actuals. The stock boasts an average four-quarter earnings surprise of 72.46%. SMERY currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Valero Energy: It is the largest independent refiner and marketer of petroleum products in the United States. On April 30, 2026, the company announced first-quarter 2026 results. Its revenues improved 7% year over year to $32.4 million, while its adjusted EPS grew a massive 374.2% to $4.22.
The Zacks Consensus Estimate for VLO’s 2026 revenues indicates an improvement of 8.6% from the prior-year reported number. The stock delivered a trailing four-quarter average earnings surprise of 25.60% and currently sports a Zacks Rank #1.
RB Global: It is an omnichannel marketplace that provides value-added insights, services and transaction solutions for buyers and sellers of commercial assets and vehicles. On May 18, 2026, RB Global announced that it has completed the acquisition of Big Iron Auction Company, accelerating its strategic expansion into the U.S. agriculture market.
The Zacks Consensus Estimate for RBA’s 2026 revenues indicates an improvement of 6.7% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 15.40%. It currently carries a Zacks Rank #2.
Kirby: It is the largest domestic tank barge operator in the United States. On April 30, 2026, the company released its first-quarter 2026 results. Its revenues rose 7.4% year over year to $844 million, while EPS grew 13% to $1.50.
The Zacks Consensus Estimate for KEX’s 2026 revenues suggests an improvement of 2.3% from the year-ago reported level. The stock boasts a long-term earnings growth rate of 13.90%. It currently carries a Zacks Rank #2.