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Zacks.com featured highlights: Big Lots, Louisiana-Pacific, Diamondback Energy, Alamo Group and ArcelorMittal

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For Immediate Release

Chicago, IL - November 9, 2017 - Stocks in this week's article Big Lots, Inc. BIG, Louisiana-Pacific Corporation LPX, Diamondback Energy, Inc. FANG , Alamo Group, Inc. ALG and ArcelorMittal MT .

5 Low-Leverage Stocks That Will Boost Your Portfolio

In the complex world of investment, understanding the amount of financial leverage a company bears is crucial. With capital being one of the basic factors of production, companies - especially those facing a dearth of resources - need exogenous funds to finance their corporate expenses, run operations smoothly as well as expand the realm of their business. Among equity and debt - the two most common options used to boost a company's future earnings - debt is the more popular one. This is perhaps due to the cheap and easy availability of debt over equity financing.

This is because when a company resorts to debt financing, it takes on fixed expenses in the form of interest payments for a specific time period. However, in case of equity financing, a shareholder not only becomes a partial owner of the company but also has a direct claim on the company's future profits.

Yet, debt financing has its share of drawbacks. The problem arises when leverage, referred to as the amount of debt a company bears, becomes exorbitant. A high degree of financial leverage means high interest payments, which affect the company's bottom line.

Of course, this does not mean that corporations should totally avoid debt financing. In fact, it has been an inherent instrument for corporations to grow their earnings.

Nevertheless, to be on the safe side, investors try to avoid stocks that bear large debt loads. Empirically, several leverage ratios have been constructed to measure the exact amount of debt risk a company bears in order to safeguard investors from debt traps.

Debt-to-equity ratio is one such measure, perhaps the most popular one, which has been used to evaluate a company's credit worthiness, for potential equity investments.

For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/282156/5-low-leverage-stocks-that-will-boost-your-portfolio

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.

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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 http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

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Louisiana-Pacific Corporation (LPX): Free Stock Analysis Report

Alamo Group, Inc. (ALG): Free Stock Analysis Report

Diamondback Energy, Inc. (FANG): Free Stock Analysis Report

Big Lots, Inc. (BIG): Free Stock Analysis Report

ArcelorMittal (MT): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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