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Bet on These 5 Low-Leverage Stocks as Bond Yields Dip
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Key Takeaways
LifeStance Health's revenues rose 26%, while visit volumes improved 19% to 2.6 million in Q2 2026.
Valero Energy's Q2 adjusted EPS surged to $12.54 from $2.28, while revenues jumped 49% year over year.
Comfort Systems' Q2 revenues rose 50.7%, with backlog reaching $14.06 billion as of June 30, 2026.
Wall Street ended Aug. 25, 2026, on a higher note as mega-cap technology and semiconductor stocks rebounded from the previous session’s selloff, led by gains in companies such as Nvidia ahead of major corporate earnings reports. A drop in oil prices and bond yields also likely boosted investor optimism in the stock market.
While a tech rebound might bring temporary relief for investors, the ongoing U.S.-Canada trade tensions remain a concern and are yet to have a substantial impact on the market. Amid this backdrop, investors might want to pivot toward financially resilient companies — specifically low-leverage stocks backed by strong balance sheets — as a prudent defensive strategy.
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 LifeStance Health Group (LFST - Free Report) , NVIDIA (NVDA - Free Report) , Valero Energy (VLO - Free Report) , Comfort Systems (FIX - Free Report) and National Vision (EYE - 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 second-quarter 2026 earnings season almost behind us, 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 with a negative or zero debt-to-equity ratio, we present our five picks out of the 16 that made it through the screen.
LifeStance Health: It is a provider of virtual and in-person outpatient mental health care for children, adolescents and adults of mental health conditions. On Aug. 6, 2026, the company announced its second-quarter 2026 results. Its revenues increased 26% year over year, while its visit volumes improved 19% to 2.6 million.
The Zacks Consensus Estimate for LFST’s 2026 revenues indicates an improvement of 19.7% from the prior-year reported level. The Zacks Consensus Estimate for LFST’s 2026 earnings indicates a massive surge of 700% from the prior-year reported level. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA: It is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit (GPU). On Aug. 24, 2026, the company announced that its Vera Rubin rack-scale system NVIDIA Groq 3 LPX is in full production.
The Zacks Consensus Estimate for NVDA’s fiscal 2027 revenues indicates an improvement of 79.9% from the prior-year reported numbers. The stock boasts a long-term (three-to-five years) earnings growth rate of 58.30%. NVDA currently carries a Zacks Rank #2.
Valero Energy: It is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. On July 30, 2026, the company announced its second-quarter 2026 results.
VLO’s second-quarter adjusted earnings per share were $12.54, which marked a massive improvement from the year-ago quarter’s reported level of $2.28. Its revenues soared 49% year over year to $44.5 billion.
The Zacks Consensus Estimate for VLO’s 2026 revenues indicates an improvement of 19.5% from the prior-year reported number. The stock boasts a long-term (three-to-five years) earnings growth rate of 37.30%. It currently sports a Zacks Rank #1.
Comfort Systems: It is a national provider of comprehensive mechanical and electrical contracting services, serving commercial, industrial and institutional end markets across the United States. On July 23, 2026, the company announced its second-quarter 2026 results. Its second-quarter revenues improved 50.7% year over year, while backlog as of June 30, 2026 was $14.06 billion compared with $8.12 billion as of June 30, 2025.
The Zacks Consensus Estimate for FIX’s 2026 revenues suggests an improvement of 38.3% from the year-ago reported level. The Zacks Consensus Estimate for FIX’s 2026 earnings suggests an improvement of 58.8% from the year-ago reported level. It currently sports a Zacks Rank #1.
National Vision: It is a value-focused optical retailer in the United States, offering eye exams, eyeglasses and contact lenses through a portfolio of owned and host brands, supported by omnichannel websites and a dedicated e-commerce offering. On Aug 12, 2026, the company reported second-quarter 2026 results. EYE’s revenues rose 2.5% year over year to $499 million, while its adjusted earnings per share improved 39% to 25 cents.
The Zacks Consensus Estimate for EYE’s 2026 revenues indicates an improvement of 3.8% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 19.50%. It currently holds a Zacks Rank #2.
View the Zacks #1 Rank List
Image: Shutterstock
Bet on These 5 Low-Leverage Stocks as Bond Yields Dip
Key Takeaways
Wall Street ended Aug. 25, 2026, on a higher note as mega-cap technology and semiconductor stocks rebounded from the previous session’s selloff, led by gains in companies such as Nvidia ahead of major corporate earnings reports. A drop in oil prices and bond yields also likely boosted investor optimism in the stock market.
While a tech rebound might bring temporary relief for investors, the ongoing U.S.-Canada trade tensions remain a concern and are yet to have a substantial impact on the market. Amid this backdrop, investors might want to pivot toward financially resilient companies — specifically low-leverage stocks backed by strong balance sheets — as a prudent defensive strategy.
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 LifeStance Health Group (LFST - Free Report) , NVIDIA (NVDA - Free Report) , Valero Energy (VLO - Free Report) , Comfort Systems (FIX - Free Report) and National Vision (EYE - 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 second-quarter 2026 earnings season almost behind us, 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 with a negative or zero debt-to-equity ratio, we present our five picks out of the 16 that made it through the screen.
LifeStance Health: It is a provider of virtual and in-person outpatient mental health care for children, adolescents and adults of mental health conditions. On Aug. 6, 2026, the company announced its second-quarter 2026 results. Its revenues increased 26% year over year, while its visit volumes improved 19% to 2.6 million.
The Zacks Consensus Estimate for LFST’s 2026 revenues indicates an improvement of 19.7% from the prior-year reported level. The Zacks Consensus Estimate for LFST’s 2026 earnings indicates a massive surge of 700% from the prior-year reported level. It currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA: It is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit (GPU). On Aug. 24, 2026, the company announced that its Vera Rubin rack-scale system NVIDIA Groq 3 LPX is in full production.
The Zacks Consensus Estimate for NVDA’s fiscal 2027 revenues indicates an improvement of 79.9% from the prior-year reported numbers. The stock boasts a long-term (three-to-five years) earnings growth rate of 58.30%. NVDA currently carries a Zacks Rank #2.
Valero Energy: It is a multinational manufacturer and marketer of petroleum-based and low-carbon liquid transportation fuels and petrochemical products. On July 30, 2026, the company announced its second-quarter 2026 results.
VLO’s second-quarter adjusted earnings per share were $12.54, which marked a massive improvement from the year-ago quarter’s reported level of $2.28. Its revenues soared 49% year over year to $44.5 billion.
The Zacks Consensus Estimate for VLO’s 2026 revenues indicates an improvement of 19.5% from the prior-year reported number. The stock boasts a long-term (three-to-five years) earnings growth rate of 37.30%. It currently sports a Zacks Rank #1.
Comfort Systems: It is a national provider of comprehensive mechanical and electrical contracting services, serving commercial, industrial and institutional end markets across the United States. On July 23, 2026, the company announced its second-quarter 2026 results. Its second-quarter revenues improved 50.7% year over year, while backlog as of June 30, 2026 was $14.06 billion compared with $8.12 billion as of June 30, 2025.
The Zacks Consensus Estimate for FIX’s 2026 revenues suggests an improvement of 38.3% from the year-ago reported level. The Zacks Consensus Estimate for FIX’s 2026 earnings suggests an improvement of 58.8% from the year-ago reported level. It currently sports a Zacks Rank #1.
National Vision: It is a value-focused optical retailer in the United States, offering eye exams, eyeglasses and contact lenses through a portfolio of owned and host brands, supported by omnichannel websites and a dedicated e-commerce offering. On Aug 12, 2026, the company reported second-quarter 2026 results. EYE’s revenues rose 2.5% year over year to $499 million, while its adjusted earnings per share improved 39% to 25 cents.
The Zacks Consensus Estimate for EYE’s 2026 revenues indicates an improvement of 3.8% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 19.50%. It currently holds a Zacks Rank #2.