U.S. Markets closed

Zacks.com featured highlights include: Merit Medical, Pinnacle West, Amedysis, Southwest Airlines and Royal Caribbean

Zacks Equity Research
Prologis' (PLD) Q1 results likely to reflect solid fundamentals of industrial real estate market, backed by healthy economy and strengthening e-commerce market, though supply is also rising.

For Immediate Release

Chicago, IL – February 22, 2019 - Stocks in this week’s article are Merit Medical Systems Inc. MMSI, Pinnacle West Capital Corp. PNW, Amedysis, Inc. AMED, Southwest Airlines Co. LUV and Royal Caribbean Cruises Ltd. RCL.

Worried About Rate Hikes? Buy These 5 Low-Leverage Stocks

In the complex world of investment, debt financing is a well-known strategy adopted by the majority of corporations for expanding their business operations from time to time. Dearth of ample funds is the primary driving force behind this strategy. However, resorting to debt is still considered a taboo as it carries the burden of interest payments.

This is because companies with large debt loads are more vulnerable during economic downturns and can even go bankrupt in the worst-case scenario. Of course, companies may resort to equity financing as an alternative option to boost their financial resources. However, in case of equity financing, a shareholder not only becomes a partial owner of the company but develops a direct claim on the company’s future profits as well.

So, debt financing remains the favored option for corporates in times of funding their operations. In particular, it is the easy and cheap availability of debt that makes it more popular among corporations.

However, too much debt is detrimental for a company’s health. If a company is highly leveraged, in other words carries exorbitant amount of debt, investors will not add it to their portfolios willingly. Afterall, a high degree of financial leverage means high interest payments, which may affect the company's bottom line.

With the current U.S. administration being in favor of a steady interest rate hike over the near term, investors might be reluctant to pick any U.S. stock for the time being. However, a mere rate hike should not discourage investors since the U.S. economy has been debt dependent since its foundation and is still the largest in the world. What they need to do is pick companies that have a lower debt burden.

This is where the significance of financial leverage ratio comes into play as it measures the extent of financial leverage a company bears. To choose a corporation that is not so highly indebted, several leverage ratios have been developed over the years, with debt-to-equity ratio being the most popular.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/355968/worried-about-rate-hikes-buy-these-5-low-leverage-stocks

Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.

About Screen of the Week

Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine.  But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.

Follow us on Twitter:  https://twitter.com/zacksresearch

Join us on Facebook:  https://www.facebook.com/ZacksInvestmentResearch

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Contact: Jim Giaquinto

Company: Zacks.com

Phone: 312-265-9268

Email: pr@zacks.com

Visit: www.Zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
Royal Caribbean Cruises Ltd. (RCL) : Free Stock Analysis Report
Amedisys, Inc. (AMED) : Free Stock Analysis Report
Merit Medical Systems, Inc. (MMSI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research