Wall Street finished June 24, 2026, on a mixed note, as investors actively rotated out of high-flying technology stocks to find support in cyclical and consumer discretionary sectors. This rotation caused the tech-heavy Nasdaq and the benchmark S&P 500 to pull back, while the broad-based Dow Jones Industrial Average managed to inch higher.
While concerns surrounding overvalued tech companies triggered the localized sell-off, energy investors found unexpected relief in a steady decline in oil prices. Crude benchmarks plummeted to their lowest levels since February-end, before the United States and Israel launched joint airstrikes against Iran.
However, this newfound stability in energy prices is unlikely to persist for long, given the structural geopolitical tensions still simmering across the globe.
Against this volatile landscape, turning to financially resilient companies, particularly those with low leverage, is a necessity right now.
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 Ternium TX, CBOE Global Markets CBOE, Tutor Perini TPC, Sunstone Hotel Investors SHO and Casey’s General Stores CASY.
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 ahead of 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 12 that made it through the screen.
Ternium: It is the leading producer of flat and long steel products of Latin America and consolidates the operations of the steel companies like Hylsa in Mexico, Siderar in Argentina and Sidor in Venezuela.
On May 5, 2026, the company announced its first-quarter 2026 results. Its earnings per ADS improved a massive 220.6% to $1.09. Ternium invested $406 million in the first quarter, primarily for the expansion of its industrial center in Pesquería, Mexico.
The Zacks Consensus Estimate for TX’s 2026 sales indicates an improvement of 6.1% from the prior-year reported level. The stock boasts a long-term (three-to-five year) earnings growth rate of 52.80%. It currently sports a Zacks Rank #1.
CBOE Global Markets: It is the world's go-to derivatives and exchange network, delivering cutting-edge trading, clearing and investment solutions to people around the world. On June 23, 2026, CBOE announced the launch of the first products in its new prediction markets suite, Cboe Predicts. Cboe Predicts represents the latest expansion of CBOE’s S&P 500 Index (SPX) product suite.
The Zacks Consensus Estimate for CBOE’s 2026 revenues indicates an improvement of 13.1% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 16.80%. CBOE currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Tutor Perini: It is a diversified general contracting, construction management and design-build services provider to private clients and public agencies worldwide. On June 9, 2026, Tutor Perini announced that its subsidiary, Roy Anderson Corp, has won a contract worth approximately $114 million for the Jones Hall Project at the University of Mississippi (Ole Miss) in Oxford, MS. Per the terms of this project, TPC will construct a new four-story, approximately 110,000-square-foot academic facility that will serve as the home of the nationally recognized Patterson School of Accountancy.
The Zacks Consensus Estimate for TPC’s 2026 revenues indicates an improvement of 12.7% from the prior-year reported number. The Zacks Consensus Estimate for TPC’s 2026 earnings indicates an improvement of 20.8% from the prior-year reported number. It currently holds a Zacks Rank #2.
Sunstone Hotel Investors: It is a lodging real estate company that owns hotels primarily in the upper-upscale and upscale segments, primarily operated under franchises owned nationally-recognized companies, such as Marriott, Hilton, InterContinental and Hyatt.
On June 23, 2026, Sunstone Hotel Investors reported that it has entered into a definitive agreement to sell the 821-room Hyatt Regency San Francisco hotel to funds affiliated with Blackstone Real Estate for a gross sale price of $279 million.
The Zacks Consensus Estimate for SHO’s 2026 revenues indicates an improvement of 4.5% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 4.90%. It currently sports a Zacks Rank #1.
Casey’s General Stores: It is a chain of convenience stores that operates across 19 states of the United States. On June 24, 2026, the company unveiled its new three-year strategic plan, which focused on expanding CASY’s food business, growing its store base, and leveraging technology to improve efficiency and execution. In particular, the company plans to add at least 400 stores through a combination of strategic acquisitions and new-store development.
The Zacks Consensus Estimate for CASY’s fiscal 2027 revenues suggests an improvement of 16.2% from the year-ago reported level. The stock boasts a long-term earnings growth rate of 15.80%. It currently sports a Zacks Rank #1.
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Cboe Global Markets, Inc. (CBOE): Free Stock Analysis Report
Sunstone Hotel Investors, Inc. (SHO): Free Stock Analysis Report
Ternium S.A. (TX): Free Stock Analysis Report
Casey's General Stores, Inc. (CASY): Free Stock Analysis Report
Tutor Perini Corporation (TPC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).