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New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
Investors looking for stocks to buy should always take a look at debt loads to make sure they won’t get blindsided by balance sheet issues at some point down the line.
When the economy is good, there’s easy credit everywhere. However, as investors back in 2007 and 2008 learned the hard way, when the economy goes south, lenders get tight with their cash.
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Companies that rely on debt to fund their operations often trade at a valuation discount to self-funding peers. Debt payments can hang like a dark cloud over a company and weigh on its share price. In addition, the more debt a company takes on, the more expensive additional debt may be. If a company’s balance sheet gets too bloated, credit rating agencies can downgrade a stock’s credit rating. A lower credit rating means higher interest rates on debt.
Some industries are more debt-reliant than others, so just because a company has relatively high debt levels doesn’t necessarily mean investors should stay away from a stock. But almost every time a company goes belly-up, debt plays a role in its downfall.
High-Debt Stocks
Here are the 10 S&P 500 stocks with the highest long-term debt-to-equity ratios in the S&P 500, according to Finviz:
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- The Western Union Company (NYSE:WU), 93.1 LTDebt/Eq.
- Navient Corp (NASDAQ:NAVI), 26.2 LTDebt/Eq.
- O'Reilly Automotive Inc (NASDAQ:ORLY), 26.1 LTDebt/Eq.
- Lamb Weston Holdings Inc (NYSE:LW), 23.9 LTDebt/Eq.
- Moody's Corporation (NYSE:MCO), 14.9 LTDebt/Eq.
- Marriott International Inc (NASDAQ:MAR), 8.2 LTDebt/Eq.
- Simon Property Group Inc (NYSE:SPG), 8.1 LTDebt/Eq.
- S&P Global Inc (NYSE:SPGI), 7.1 LTDebt/Eq.
- Alliance Data Systems Corporation (NYSE:ADS), 7.0 LTDebt/Eq.
- Campbell Soup Company (NYSE:CPB), 6.4 LTDebt/Eq.
Benzinga’s Take
In addition to looking at existing debt levels, investors should look to see how those debt levels have changed in the past several years. Companies with stable debt levels or falling debt levels may be perfectly fine investments, but steadily rising debt levels may be a sign of an unsustainable business model.
Do you agree with this take? Email feedback@benzinga.com with your thoughts.
Related Links:
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16 Stocks With The Highest Long-Term Sales Growth Rate
Photo credit: Usien [GFDL)], via Wikimedia Commons
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.