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5 Low-Leverage Stocks to Buy as US Treasury Yields Cool Down
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Key Takeaways
Low-leverage companies can help limit financial risk amid interest rate swings and economic uncertainty.
The screen favors companies with manageable debt, earnings growth, and favorable growth expectations.
The five picks span energy, apparel, footwear and utilities, offering exposure across diverse industries.
Wall Street finished last week in the green as falling oil prices, cooling Treasury yields and strong tech gains pushed major indices higher.
Despite this rally, persistent macroeconomic pressure and sudden geopolitical tensions continue to fuel market uncertainty. For risk-averse investors concerned about high-beta volatility, shifting capital toward companies with lower leverage may provide a more defensive approach.
These financially conservative firms maintain pristine balance sheets with minimal debt, making them far better equipped to withstand interest rate swings and broader economic shifts. By minimizing financial risk while generating steady cash flows, these low-leverage stalwarts provide a solid foundation for your portfolio and act as a reliable strategic hedge against an 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 second-quarter 2026 earnings season 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 that have a negative or a zero debt-to-equity ratio, we present our five picks out of the 21 that made it through the screen.
HF Sinclair: It is an energy company that produces and markets light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. On Aug. 8, 2026, the company announced that it has finalized a joint venture agreement with Phillips 66 and Kinder Morgan, Inc. and made a final investment decision to move forward with the proposed Western Gateway Pipeline system (Western Gateway).
By combining the capabilities of Phillips 66, Kinder Morgan and HF Sinclair, Western Gateway is expected to strengthen fuel supply reliability and deliver a more cost-effective, resilient path for growing markets across the West.
The Zacks Consensus Estimate for DINO’s 2026 sales indicates an improvement of 23% from the prior-year reported level. The Zacks Consensus Estimate for DINO’s 2026 earnings implies an improvement of 246.1% from the prior-year reported level. It currently sports a Zacks Rank #1.
Vince Holdings: It offers a broad range of women's and men's ready-to-wear apparel, including its signature cashmere sweaters, leather jackets, luxe leggings, dresses, silk and woven tops, denim and footwear. On Sept. 9, 2026, the company announced its second-quarter fiscal 2026 results. Its net sales increased 11.7% year over year to $81.8 million, while adjusted net income improved a solid 175.5% to $13.5 million.
The Zacks Consensus Estimate for VNCE’s fiscal 2026 revenues indicates an improvement of 12.7% from the prior-year reported actuals. The Zacks Consensus Estimate for VNCE’s fiscal 2026 earnings implies a solid surge of 172.7% from the prior-year reported actuals. The stock currently sports a Zacks Rank #1.
Ganesco: It is a specialty retail and branded company, which sells footwear and accessories in retail stores. On Sept. 3, 2026, the company announced its second-quarter fiscal 2027 results. Its adjusted gross margin improved 140 basis points year over year. GCO raised its fiscal 2027 adjusted earnings per share guidance to the high end of the $2.00-$2.40 range.
The Zacks Consensus Estimate for GCO’s fiscal 2027 earnings indicates an improvement of 62.1% from the prior-year reported number. The stock boasts a four-quarter average earnings surprise of 11.16% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
One Gas: It is a regulated natural gas distribution utility. On Aug. 4, 2026, the company announced its second-quarter 2026 results. Its operating income improved 15% year over year, while its EPS soared 39.6% to 73 cents.
The stock boasts a long-term (three-to-five years) earnings growth rate of 7.40%. It currently carries a Zacks Rank #2 and boasts a four-quarter average earnings surprise of 7.36%.
Green Plains: It is a vertically integrated producer, marketer and distributor of ethanol. On Aug. 6, 2026, the company announced its second-quarter 2026 results. Its gross margin improved 172% year over year, whereas its consolidated ethanol crush margin improved 261.7%.
The Zacks Consensus Estimate for GPRE’s 2026 earnings implies growth of 213.3% from the year-ago reported level. The stock currently boasts a four-quarter average earnings surprise of 1,172.55%. It currently holds a Zacks Rank #2.
View the Zacks #1 Rank List
Image: Bigstock
5 Low-Leverage Stocks to Buy as US Treasury Yields Cool Down
Key Takeaways
Wall Street finished last week in the green as falling oil prices, cooling Treasury yields and strong tech gains pushed major indices higher.
Despite this rally, persistent macroeconomic pressure and sudden geopolitical tensions continue to fuel market uncertainty. For risk-averse investors concerned about high-beta volatility, shifting capital toward companies with lower leverage may provide a more defensive approach.
These financially conservative firms maintain pristine balance sheets with minimal debt, making them far better equipped to withstand interest rate swings and broader economic shifts. By minimizing financial risk while generating steady cash flows, these low-leverage stalwarts provide a solid foundation for your portfolio and act as a reliable strategic hedge against an energy-driven economic slowdown.
Against this backdrop, we recommend low-leverage stocks, such as HF Sinclair (DINO - Free Report) , Vince Holdings (VNCE - Free Report) , Ganesco (GCO - Free Report) , One Gas Inc. (OGS - Free Report) , and Green Plains (GPRE - 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 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 that have a negative or a zero debt-to-equity ratio, we present our five picks out of the 21 that made it through the screen.
HF Sinclair: It is an energy company that produces and markets light products such as gasoline, diesel fuel, jet fuel, renewable diesel and other specialty products. On Aug. 8, 2026, the company announced that it has finalized a joint venture agreement with Phillips 66 and Kinder Morgan, Inc. and made a final investment decision to move forward with the proposed Western Gateway Pipeline system (Western Gateway).
By combining the capabilities of Phillips 66, Kinder Morgan and HF Sinclair, Western Gateway is expected to strengthen fuel supply reliability and deliver a more cost-effective, resilient path for growing markets across the West.
The Zacks Consensus Estimate for DINO’s 2026 sales indicates an improvement of 23% from the prior-year reported level. The Zacks Consensus Estimate for DINO’s 2026 earnings implies an improvement of 246.1% from the prior-year reported level. It currently sports a Zacks Rank #1.
Vince Holdings: It offers a broad range of women's and men's ready-to-wear apparel, including its signature cashmere sweaters, leather jackets, luxe leggings, dresses, silk and woven tops, denim and footwear. On Sept. 9, 2026, the company announced its second-quarter fiscal 2026 results. Its net sales increased 11.7% year over year to $81.8 million, while adjusted net income improved a solid 175.5% to $13.5 million.
The Zacks Consensus Estimate for VNCE’s fiscal 2026 revenues indicates an improvement of 12.7% from the prior-year reported actuals. The Zacks Consensus Estimate for VNCE’s fiscal 2026 earnings implies a solid surge of 172.7% from the prior-year reported actuals. The stock currently sports a Zacks Rank #1.
Ganesco: It is a specialty retail and branded company, which sells footwear and accessories in retail stores. On Sept. 3, 2026, the company announced its second-quarter fiscal 2027 results. Its adjusted gross margin improved 140 basis points year over year. GCO raised its fiscal 2027 adjusted earnings per share guidance to the high end of the $2.00-$2.40 range.
The Zacks Consensus Estimate for GCO’s fiscal 2027 earnings indicates an improvement of 62.1% from the prior-year reported number. The stock boasts a four-quarter average earnings surprise of 11.16% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
One Gas: It is a regulated natural gas distribution utility. On Aug. 4, 2026, the company announced its second-quarter 2026 results. Its operating income improved 15% year over year, while its EPS soared 39.6% to 73 cents.
The stock boasts a long-term (three-to-five years) earnings growth rate of 7.40%. It currently carries a Zacks Rank #2 and boasts a four-quarter average earnings surprise of 7.36%.
Green Plains: It is a vertically integrated producer, marketer and distributor of ethanol. On Aug. 6, 2026, the company announced its second-quarter 2026 results. Its gross margin improved 172% year over year, whereas its consolidated ethanol crush margin improved 261.7%.
The Zacks Consensus Estimate for GPRE’s 2026 earnings implies growth of 213.3% from the year-ago reported level. The stock currently boasts a four-quarter average earnings surprise of 1,172.55%. It currently holds a Zacks Rank #2.