Federal Reserve Chairman Jerome Powell recently announced that the central bank’s policy will involve keeping interest rates higher for a longer period, extending for several months. This has resulted in the cost of carrying debt becoming more significant for companies. As a result, it is wise to consider investing in low-debt stocks during this time.
Among the companies recommended for investment is Cognizant Technology Solutions Corp., an IT services provider based in Teaneck, New Jersey. The company serves clients such as Comcast, JP Morgan, Walgreens, and Walmart, with a significant portion of its workforce located in India. Cognizant has seen consistent revenue growth over the past decade, along with steady profits and low debt levels.
Incyte Corp., a pharmaceutical company focusing on cancer treatment, inflammation, and autoimmunity, has also been highlighted as a low-debt investment option. The company’s revenue growth has averaged 21% annually over the past decade, with profits in seven out of the last ten years. With minimal debt levels relative to equity, Incyte Corp. presents a promising investment opportunity.
Mueller Industries Inc., known for its diverse range of metal-based products, has demonstrated profitability for the past 30 years, including during economic downturns. The company has minimal debt levels and a strong cash position, making it a resilient investment choice. Similarly, Cal-Maine Foods Inc., the largest U.S. egg producer, operates without any debt on its books. The company’s profits fluctuate due to varying costs in the egg industry, but it has a history of adjusting dividends based on performance.
Alpha Metallurgical Resources Inc., a coal mining company based in Bristol, Tennessee, was also identified as a low-debt investment option. Despite the declining coal industry, the company’s strategic positioning in the energy and steel production sectors makes it a viable investment opportunity. Additionally, the company’s low debt-to-equity ratio and attractive valuation make it an intriguing investment prospect.
The article concludes with the author’s track record of recommending low-debt stocks over the years, citing an average 12-month return of 24.8%. The recommendations have outperformed the S&P 500 Total Return Index in most cases, highlighting the success of investing in low-debt companies. The author remains optimistic about the new crop of low-debt stocks and encourages readers to consider them for their investment portfolios.
