Bet on These 5 Low-Leverage Stocks as Middle East Conflict Goes On

Wall Street ended March 19, 2026, on a weak note, with all three major U.S. indices falling below their respective 200-day moving averages, accelerating equity sell-offs. The downturn was caused by surging oil prices following strikes on Gulf energy hubs and a hawkish Fed ‘dot plot’ signaling just one rate cut this year, heightening investors’ concerns that rising energy costs could weigh on the AI-driven tech boom.

Against this backdrop, investors may not feel confident enough to go for high-beta growth-oriented stocks and would instead look for safe bets. This highlights the importance of low-leverage stocks — companies with minimal debt relative to equity.
Better equipped to weather interest rate volatility and geopolitical shocks, these firms offer a solid foothold as the market grapples with a looming energy-driven slowdown.

We recommend low-leverage stocks like Nu Holdings NU, Casey’s General Stores CASY, Astec Industries ASTE, HNI Corp. HNI, and Blue Bird BLBD.

Now, before selecting low-leverage stocks, let’s explore what leverage is and how choosing a low-leverage stock can help investors.

What’s the Significance of Low-Leverage Stocks?

In finance, leverage refers to the practice of borrowing capital to help companies run their operations smoothly and expand their business. Such borrowings are done through debt financing. But there remains an option for equity finance. This is probably due to the cheap and easy availability of debt financing over equity financing.

Debt financing has its share of drawbacks. It is desirable only as long as it successfully generates a higher rate of return compared to the interest rate. To avoid considerable losses in your portfolio, it is advisable to avoid companies that rely excessively on debt financing.

The crux of safe investment lies in choosing a company that is not burdened with debt, as a debt-free stock is almost impossible to find.
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 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 reflects improved solvency for a company.

With the first-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 a minimum of $10 or above.

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 15 stocks that made it through the screen.

NU Holdings: It is one of the largest digital financial services platforms in the world, serving 131 million customers across Brazil, Mexico and Colombia. On March 11, 2026, the company announced that it is investing in expanding its brand power into new territories and cited its recent partnerships with Inter Miami CF and the Mercedes-AMG PETRONAS Formula 1 Team as examples of this strategy.

The Zacks Consensus Estimate for NU’s 2026 revenues indicates an improvement of 34.3% from the prior-year estimated level. The stock boasts a long-term (three-to-five years) earnings growth rate of 29.30%. It currently holds a Zacks Rank #2.

Casey’s General Stores: It operates as a chain of convenience stores. On March 9, 2026, the company announced its financial results for third-quarter fiscal 2026. Its inside same-store sales increased 4% year over year, while its earnings per share (EPS) surged a solid 49.8%.

The Zacks Consensus Estimate for CASY’s fiscal 2026 revenues indicates an improvement of 8.1% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 17%. CASY currently holds a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Astec Industries: It is a manufacturer and marketer of road-building equipment. On March 1, 2026, the company unveiled Roadtec Renew, a dedicated rebuild and repair program offered as part of Astec’s comprehensive support for customers in the road construction industry.

This program will provide trusted solutions and tailored OEM support designed to restore, extend, and protect Roadtec and Carlson road construction equipment while lowering the total cost of ownership.

The Zacks Consensus Estimate for ASTE’s 2026 revenues indicates an improvement of 13% from the prior-year estimated number. The stock boasts a long-term earnings growth rate of 7%. It currently sports a Zacks Rank #1.

HNI: It is a provider of workplace furnishings. On Feb. 25, 2026, the company announced its fourth-quarter 2025 results. Its net sales improved 38.3% year over year to $888.4 million, while its adjusted gross profit went up 10 basis points.

The Zacks Consensus Estimate for HNI’s first-quarter 2026 sales indicates an improvement of 3.5% from the prior-year reported actuals. The stock boasts a long-term earnings growth rate of 20%. It currently carries a Zacks Rank #2.

Blue Bird: It is engaged in the designing, engineering, manufacturing and sale of school buses and related parts. On Feb. 17, 2026, the company signed an agreement to acquire Girardin Group’s stake in the 50/50 Micro Bird joint venture, thereby taking full ownership of the enterprise. Blue Bird will pay approximately $200 million for Girardin’s joint venture share, with 30% in cash and 70% in BLBD common stock.

BLBD boasts a four-quarter average earnings surprise of 23.33%. The stock holds a long-term earnings growth rate of 5.9%. It currently sports a Zacks Rank #1.

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Astec Industries, Inc. (ASTE): Free Stock Analysis Report

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HNI Corporation (HNI): Free Stock Analysis Report

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