It is widely understood that employing debt to fund operations can act as a powerful financial tool. But debt doesn’t come without its trade-offs. Borrowing allows companies to lower their taxable income through interest deductions and helps them to potentially boost their returns during good times. However, debt also introduces financial obligations that don’t go away when earnings fall. For companies with inconsistent cash flow, those obligations can become a serious liability.

That’s why companies with little or no debt often stand on more stable ground. Without the burden of regular interest payments or looming repayments, these businesses tend to have more freedom—whether that means reinvesting in operations, pursuing acquisitions, or returning capital to shareholders. In uncertain economic climates, that flexibility can make all the difference.

With Macro Uncertainty, Risks Remain to the Downside

U.S. corporate bankruptcy filings continue to climb, with 2025 shaping up to be one of the most active years for bankruptcies in over a decade, according to a July 8 report by S&P Global Market Intelligence. June alone saw 63 new filings—slightly lower than May’s revised count of 64—but the broader trend remains clearly upward.

As per the report, 371 corporate bankruptcies have been recorded year-to-date, marking the highest total for the first half of any year since 2010. This rising trend reflects growing financial stress across the corporate sector. The data reflects growing pressure across industries as many companies struggle under heavy debt loads. Access to credit is also tightening, with interest rates expected to remain elevated through the summer, based on S&P Global’s projections.

Additionally, S&P Global Market Intelligence notes that consumers, too, are beginning to show signs of strain. A softer job market, persistent inflation, and renewed tariff policies under the Trump administration are all weighing on household budgets. These headwinds are feeding into weaker corporate revenues, further challenging balance sheets.

Being debt-free isn’t inherently better in every situation, especially for companies with weaker fundamentals. But in today’s environment of high interest rates and uneven growth, companies without debt are often better placed to weather macroeconomic headwinds. Their clean balance sheets offer not just safety, but strategic optionality. And for investors, that kind of resilience is increasingly valuable.

So, where should you look for debt-free stock opportunities? Let’s explore our selection of the 11 best debt-free stocks to invest in right now.

Our Methodology

To screen for the 11 best debt-free stocks, we first compiled a list of U.S. stocks with a market capitalization of at least $2 billion. For the shortlisted stocks, we compared their enterprise value (EV) to their market capitalisation (EV to Market cap ratio). A ratio of 1.0 or below indicates that the company has no debt or minimal debt. From this refined list, we identified the top 11 stocks with a potential upside of at least 20%, and the highest hedge fund ownership by leveraging data from Insider Monkey’s Q1 2025 hedge fund database. Finally, we ranked these stocks in ascending order based on the number of hedge funds holding positions in them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Note: All pricing and analyst rating data are as of market close on July 7, 2025.

11 Best Debt-Free Stocks to Invest in Right Now

11. QXO Inc. (NYSE:QXO)

EV to Market Cap: 0.66

Number of Hedge Fund Holders: 36

QXO Inc. (NYSE:QXO) is one of the 11 best debt-free stocks to invest in right now. The company presents a compelling long-term investment opportunity as it aims to become the tech-enabled leader in a massive, fragmented industry. With over 7,000 distributors across North America, the $800 billion building products distribution market is primed for consolidation.

QXO plans to build a $50 billion revenue platform over the next decade by acquiring undervalued regional businesses, particularly in roofing, waterproofing, and adjacent categories, and rapidly enhancing their performance.

In addition, structural demand drivers, such as a persistent housing shortage, an aging housing base, and multitrillion-dollar infrastructure needs, should act as long-term tailwinds.

Truist analyst Keith Hughes echoed this long-term view in his July 1 initiation of coverage on QXO, with a Buy rating and a $30 price target. According to Hughes, QXO’s acquisition of Beacon Roofing Supply Inc. in April marks a significant first step toward consolidating what remains a highly fragmented industry.

The analyst views this transaction as more than a one-off move. Instead, it reflects the company’s broader ambition to scale rapidly through acquisitions. He noted that QXO has laid out an aggressive roadmap, one that will likely involve consistent deal flow. In Hughes’ view, the company is well-positioned, both structurally and strategically, to execute on this pace of consolidation.

QXO Inc. (NYSE:QXO) is a distributor of roofing, waterproofing, and complementary building products in the United States.

10. United Therapeutics Corp. (NASDAQ:UTHR)

EV to Market Cap: 0.64

Number of Hedge Fund Holders: 43

United Therapeutics Corp. (NASDAQ:UTHR) is one of the 11 best debt-free stocks to invest in right now. The company boasts a strong portfolio led by Tyvaso, its inhaled therapy for pulmonary hypertension, and a growing pipeline targeting pulmonary arterial hypertension (PAH). Its existing therapies are leading to stronger topline and earnings growth; the 17% year-over-year growth in Q1 2025 revenue and a 17% compounded annual growth rate (CAGR) over the last five years are evidence of that.

UBS analyst Ashwani Verma maintained a Buy rating on United Therapeutics (NASDAQ:UTHR) on June 30 but adjusted the price target to $385 from $410, reflecting a recalibration of expectations ahead of a key clinical update. Verma pointed to the company’s upcoming Phase III readout for idiopathic pulmonary fibrosis (IPF), expected in the third quarter, as a potential high-impact event that could meaningfully influence the stock. While binary in nature, the analyst believes the risk/reward remains attractive at current valuation levels.

Verma also highlighted Tyvaso as a continued bright spot for the company. He expects the therapy to see seasonally strong performance in both Q2 and Q3, which should support near-term revenue momentum.