Jerome Powell, the head of the Federal Reserve, has officially announced a “higher for longer” interest rate policy that is expected to last for several months. This has made carrying debt more expensive for companies, prompting a shift towards low-debt stocks in the market. Five companies that have little to no debt are being recommended for serious consideration by investors.
Cognizant Technology Solutions Corp., based in New Jersey, is an IT services provider that works with companies to improve their tech operations. The company has shown steady revenue growth over the past decade and has minimal debt, making it an attractive investment option. Similarly, Incyte Corp., a pharmaceutical company focusing on cancer treatment, has seen consistent revenue growth and low debt levels. Mueller Industries Inc., a metal-bending company from Tennessee, has a diverse product line and a strong financial track record with minimal debt.
Cal-Maine Foods Inc., the largest U.S. egg producer, has no debt on its books but faces variability in profits due to fluctuations in egg prices and production costs. Despite these challenges, the company has a history of raising dividends during good times and cutting them during bad times. Alpha Metallurgical Resources Inc., a coal mining company in Tennessee, remains a relevant player in the energy industry due to the continued demand for coal in sectors like electrical power and steel production.
The columnist, who has been writing about low-debt stocks since 1998, has seen positive returns on his recommendations in past columns. The average return on his picks has been well above the S&P 500 Total Return Index for the same periods, with many of his recommendations outperforming the benchmark. While past performance does not predict future results, the columnist’s track record has been notable. His previous year’s picks had mixed results, with some outperforming the benchmark and others falling short.
The new set of recommended low-debt stocks includes companies with strong financial fundamentals and little to no debt. Investors are encouraged to consider these companies as potential investment opportunities based on their solid track records and promising future prospects. This column serves as a guide for investors looking to capitalize on the current market conditions and make informed decisions about their investment portfolios. As always, it is important to conduct thorough research and consult with a financial advisor before making any investment decisions.
