You asked for “sleep-at-night” ideas—so we brought six dividend growers with zero or very low debt. We explain why balance-sheet strength matters, when “too little debt” is actually a red flag, and the bull/bear angles for each pick. You’ll leave with a practical checklist to vet debt risk and a shortlist you can research further—without chasing hype.
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You’ll Learn
Why (almost) no debt helps in 2026
With little or no interest in service, these firms can ride out slowdowns and keep funding R&D, buybacks, or bolt-on deals. A clean balance sheet also gives management flexibility when opportunities arise—without calling the bank or issuing shares at a bad time.
When “no debt” can be a trap
Zero debt isn’t automatically “excellent”—it can signal a team that hoards cash instead of investing for growth. If sales and EPS stagnate while cash piles up, that’s cautionary, not comforting.
Quick takes: 6 low-debt candidates
- LeMaitre Vascular (LMAT) – Niche surgical products with #1/#2 share in tiny markets; cash-funded tuck-ins keep growth compounding. Expect sharper swings as a small-cap and keep an eye on selling expenses.
- Franco-Nevada (FNV.TO) – Royalty/streaming model compounds without heavy capex or operating risk. Still, revenue can wobble with gold prices and country risk (permits, shutdowns).
- Fastenal (FAST) – On-site vending/mini-stores make customers sticky and drive recurring demand. The catch: you must carry inventory through the cycle and large accounts squeeze pricing.
- Dollarama (DOL.TO) – Private labels and fast paybacks on new stores fuel high ROIC; Latin America/Australia add runway. Watch margin pressure, online price wars, and potential store overlap.
- Toromont (TIH.TO) – CAT dealer plus Simcoe cooling rides construction, mining, and data-center demand. Cyclical end markets and full-ish valuation mean you need patience.
- Jack Henry (JKHY) – Mission-critical bank software with sticky, recurring revenue and low leverage. Growth guidance has cooled to mid-single digits and fintech rivals keep nipping.
Debt due diligence in 10 minutes
Check the trend: is long-term debt falling relative to free cash flow, and is interest coverage comfortably >8–10x? Pair that with the dividend triangle—steady growth in revenue, EPS, and dividends usually signals a disciplined capital allocator.
Position sizing & patience
Low debt doesn’t eliminate volatility, especially for small- and mid-cap stocks; size positions so a routine 20–30% drawdown won’t derail your plan. Give these time to play out and add on weakness when fundamentals hold.
Related Content
Want More? Download the Top 7 Stocks from Three Sectors Booklet
This free 16-page booklet includes:
- A 2025 stock market review for context, so you understand the environment these stocks are coming from and can build conviction instead of just chasing a name on a list.
- A simple, metrics-first approach you can reuse: you see how starting with growing sales, growing profit, and growing dividends helps you narrow the universe to companies that are already thriving, not just hyped.
Make 2026 your best investment year!
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To separate the winners from the rest, seasoned investors often rely on the Dividend Triangle. This simple yet effective framework helps identify companies with robust financial health and long-term growth potential, making it an essential tool for dividend investors.
Understanding the Dividend Triangle: The Key to Successful Dividend Growth Investing
Under-the-radar doesn’t mean under-quality. We share six dividend growers most investors ignore—and explain the simple filter we used to find them. You’ll get the quick thesis, the key risks, and where each one fits in a portfolio.
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