Top 15 Consumer Defensive Stocks With Low Debt
Marvin found 15 Consumer Defensive stocks with debt no more than half of equity and solid Overall scores. Smithfield Foods, John B. Sanfilippo & Son and Ingredion rank highest.
Consumer Defensive companies sell everyday essentials such as food, household goods and basic retail. Demand for these products tends to stay fairly steady, and low debt means a company owes relatively little compared with what its shareholders own.
Every stock here has debt of no more than half of its equity, and Marvin screened for a minimum Overall score. The list is ordered by Overall score, not by who has the least debt. The debt-to-equity figure in each pick shows how much each company borrows.
Low debt is only one piece of the picture. Some companies here have shrinking sales, thin profit margins or missing data, and each pick notes a caution.
The list
How Marvin ranked these stocks
Marvin started with companies above about $300 million in size, ranked by Marvin scores. The scores run from zero to one hundred and compare each company with others in its own industry, not with the whole market. The Consumer Defensive sector was sorted by highest Overall score first, keeping only companies with debt no more than half of equity and an Overall score of at least 55, with at most 4 per industry.
Companies above about $300 million in size, ranked by Marvin scores (0-100, relative to each company's own industry). The Consumer Defensive sector, highest Overall score first, among companies with debt no more than half of equity and an Overall score of at least 55; at most 4 per industry.
The stocks, one by one
Smithfield Foods, Inc. SFD
Smithfield Foods, a packaged foods company, has an Overall score of 96 and a debt-to-equity ratio of 0.26, which suggests light borrowing. Revenue grew 9.8% last year and operating margin was 8.6%. Caution: free cash flow margin is not available for this company.
John B. Sanfilippo & Son, Inc. JBSS
John B. Sanfilippo & Son has a debt-to-equity ratio of 0.20, which is low, and a return on equity of 16.3%. Revenue grew 6.2% last year. Caution: its free cash flow margin of 3.0% and operating margin of 7.6% are modest.
Ingredion Incorporated INGR
Ingredion has a Quality score of 93, an operating margin of 11.9% and debt-to-equity of 0.39, pointing to solid profitability with moderate borrowing. Caution: revenue growth was -2.8% last year, meaning sales shrank, and its Opportunity score is only 69.
Inter Parfums, Inc. IPAR
Inter Parfums has a gross margin of 63.8%, a free cash flow margin of 16.4% and debt-to-equity of 0.19. These suggest healthy profitability and little borrowing. Caution: revenue growth was only 2.5% last year, so expansion has been modest.
Archer-Daniels-Midland Company ADM
Archer-Daniels-Midland has debt-to-equity of 0.40 and a return on equity of 7.5%. Its gross margin of 6.9% and free cash flow margin of 2.0% are thin. Caution: revenue growth was -6.2% last year, and operating margin data is not available.
Seneca Foods Corporation SENEA
Seneca Foods has an Overall score of 84, an Opportunity score of 86 and debt-to-equity of 0.31, a fairly low debt load. Revenue grew 8.2% last year. Caution: margin and return-on-equity figures are not available, so profitability is hard to judge.
Phoenix Education Partners, Inc PXED
Phoenix Education Partners, an education services company, has an Overall score of 79 and debt-to-equity of 0.37, which suggests modest borrowing. Its Quality score is 64. Caution: growth and margin data are not available, so there is little to show how profitable it is.
Costco Wholesale Corporation COST
Costco has a Quality score of 97, a return on equity of 25.8% and debt-to-equity of 0.28. Revenue grew 10.1% last year. Caution: its operating margin is only 3.9%, and its Opportunity score of 29 is the lowest on this list.
Ollie's Bargain Outlet Holdings, Inc. OLLI
Ollie's has the fastest revenue growth on this list at 16.6%, with an operating margin of 12.3% and debt-to-equity of 0.38. Those figures suggest a growing, profitable retailer with modest debt. Caution: its Overall score of 73 sits in the middle of the pack.
Tyson Foods, Inc. TSN
Tyson Foods has debt-to-equity of 0.45 and revenue growth of 2.1%. Caution: profits are thin, with an operating margin of 2.3% and a return on equity of 3.2%. Its Quality score of 57 is among the lower ones here.
PriceSmart, Inc. PSMT
PriceSmart has debt-to-equity of 0.25, revenue growth of 7.2% and an Opportunity score of 82. These suggest steady growth with low borrowing. Caution: its free cash flow margin of 1.3% and operating margin of 4.5% are thin.
Stride, Inc. LRN
Stride, an education services company, has an operating margin of 17.9%, a free cash flow margin of 17.2% and a return on equity of 20.7%, which are strong, with debt-to-equity of 0.33. Caution: revenue growth was a modest 4.7% last year.
Village Farms International, Inc. VFF
Village Farms has the lowest debt-to-equity on this list at 0.13, and revenue grew 10.2% last year. Its gross margin was 44.3%. Caution: its free cash flow margin was negative at -0.2%, and operating margin data is not available.
Ingles Markets, Incorporated IMKTA
Ingles Markets, a grocery chain, has debt-to-equity of 0.31 and a free cash flow margin of 2.8%. Caution: revenue growth was -5.4% last year, meaning sales fell, and its operating margin of 2.6% and return on equity of 6.2% are low.
Spectrum Brands Holdings, Inc. SPB
Spectrum Brands has a free cash flow margin of 10.2%, a gross margin of 39.6% and debt-to-equity of 0.40, the highest on this list. Caution: revenue growth was -5.2% last year and return on equity was only 4.3%, so it ranks last.
Common questions
What does debt-to-equity mean?
It compares what a company owes with what its shareholders own. A lower ratio means the company relies less on borrowed money. All stocks on this list have a ratio of no more than one half.
Does low debt make a stock a safe choice?
Not necessarily. Low debt can reduce financial strain, but a company can still have falling sales, thin margins or other problems. Several companies here show shrinking revenue or weak profitability.
Why are some figures missing for certain companies?
Marvin only shows a figure when the data is available for that company. Seneca Foods and Phoenix Education Partners have the fewest figures, so their profile is less complete than the others.
Keep reading
- Top 15 Consumer Defensive Companies by Business Quality
- Top 15 Fastest-Growing Profitable Consumer Defensive Stocks
- Top 15 Packaged Foods Stocks by Marvin Score
- Top 15 Consumer Defensive Stocks by Marvin Opportunity Score
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Marvin's scores (0-100) compare each company with others in its industry today. Growth and margin figures come from SEC filings. This is general information, not personal investment advice or a recommendation to buy or sell anything. Do your own research.