Bet on These 5 Low-Leverage Stocks Amid Higher Treasury Yields

Amidst market volatility on September 3, 2025, driven by rising long-term Treasury yields, tariff concerns, and inflation fears, this analysis advocates for a defensive investment strategy centered on low-leverage stocks. The approach identifies companies with strong earnings growth and low debt-to-equity ratios, offering reduced financial risk during market turmoil. Five such companies, all holding a Zacks Rank #2 and selected via a multi-factor screen, are highlighted: NVIDIA Corp (NVDA), Sterling Infrastructure (STRL), Northern Trust Corp (NTRS), Dorman Products (DORM), and Natwest Group (NWG).

Analysis

In response to market sell-offs on September 3, 2025, driven by rising Treasury yields, tariff concerns, and inflation fears, a defensive strategy centered on low-leverage companies with strong fundamentals is proposed. This approach identifies firms via a multi-factor screen that prioritizes low debt-to-equity ratios, positive earnings growth, and a Zacks Rank #2, signaling a history of solid performance. The five highlighted companies exhibit robust growth metrics and strategic positioning. NVIDIA (NVDA) demonstrates exceptional momentum, reporting a 56% year-over-year revenue increase and a 61% EPS surge in its second-quarter fiscal 2026 results, with fiscal 2026 revenue growth estimated at 56.1%. Sterling Infrastructure (STRL) is positioned for growth following a strategic acquisition, with 2025 earnings projected to rise 45.9%. In the financial sector, Northern Trust (NTRS) secured a significant contract to service an $18.5 billion fund, supporting its 10.9% earnings growth forecast, while Natwest Group (NWG) reinforced its position in infrastructure finance, with 2025 sales expected to grow 20.1%. Dorman Products (DORM) also showed solid performance with a 23% adjusted EPS surge in Q2 2025 and an earnings growth estimate of 22.7% for the full year.

Key Decisions for Investors

• Given the stated macroeconomic pressures of rising yields and inflation, investors should consider reallocating capital toward quality companies with low financial leverage to mitigate portfolio risk.
• The five identified stocks—NVDA, STRL, NTRS, DORM, and NWG—warrant further due diligence, as they present a combination of defensive balance sheets and compelling growth outlooks, with earnings and sales projections ranging from 10.9% to over 50%.
• Look beyond the low-debt screen and assess the specific fundamental catalysts presented, such as NVDA's hyper-growth, STRL's accretive acquisition, and NTRS's major client win, as these factors may provide a basis for outperformance in an uncertain market.