Interest rates were increased numerous times by the Federal Reserve from 2018 until the COVID-19 epidemic reached the United States in the spring of 2020, when the Fed once again slashed rates to near-zero levels.
Direct Competition Has a Negative Impact
Many businesses are currently going through a deleveraging process, which is bad. On the other hand, it is excellent news for enterprises that are not in debt. Take, for example, three firms in the same industry, Company A, Company B, and Company C, all of which are publicly traded. As a result, they will become less competitive, and Company C, which does not have any debt to deliver, will gain market share at their expense.
No Debt Worries
A strong balance sheet is certainly a plus, but it is dangerous to focus just on one measure when evaluating a company. Listed below are the financial measures that will be available as of January 2022 and their historical values: cash position, one-year stock performance, operational cash flow (over the previous year), dividend yield, revenue, and net income. A healthy cash position paired with the absence of debt increases the value of a firm, which is why it will seem more interesting to prospective acquirers.
When it comes to one-year performance, witnessing again in a turbulent market is encouraging; nevertheless, when it comes to investing in debt-free enterprises, it is more of an investment than a trading opportunity. When paired with a large amount of cash and no debt, having great cash flow creation is beneficial for operational cash flow generation. This results in a financially sound corporation. The dividend yield has been taken into consideration. It is expected that dividends would be secure since these best companies have no debt and produce significant cash flow.
1. American Express (AXP)
- Total amount owed: $0
- $28.15 billion in cash and short-term investments
- The total value of the assets is $151.8 billion
- 18.5 percent of total assets are represented by cash
- Performance of the stock over one year: +14 percent
2. Apple (AAPL)
- Total amount owed: $0
- $28.5 billion in cash and short-term investments
- The total value of the assets is $150.9 billion
- In terms of a percentage of total assets, cash represents 18.9 percent
- Stock performance during one year: 62 percent
3. Citrix Systems (CTXS)
- Total amount owed: $0
- Cash and short-term investments totaled $867 million
- 4 billion and fifteen billion dollars in total assets
- Cash as a proportion of total assets: 20.9 percent
- Performance of the stock over one year: +8%
4. Amazon.com (AMZN)
- Total amount owed: $0
- $5,715 million in cash and short-term investments
- The total value of the assets is $20.34 billion
- Money in the bank as a percentage of total assets: 28.1 percent
- One-year performance of the stock: 3 percent
5. Bed Bath & Beyond (BBBY)
- Total amount owed: $0
- $1.69 billion in cash and short-term investments
- Total assets: $5.82 billion (US dollars)
- Cash as a proportion of total assets: 29.0 percent
- Performance of the stock over one year: +5%
6. T Rowe Price Group (TROW)
- Total amount owed: $0
- $1.19 billion in cash and short-term investments
- 4 billion eight hundred million dollars in total assets
- Cash as a proportion of total assets: 29.1 percent
- Stock performance over one year: +10 percent
7. Surgical Intuition (ISRG)
- Total amount owed: $0
- Cash and short-term investments totaled $917 million
- 3 billion, 333 million dollars in total assets
- Cash as a proportion of total assets: 29.13 percent
- Stock performance during one year: 52 percent
8. Forest Research Laboratories (FRX)
- Total amount owed: $0
- $2.43 billion in cash and short-term investments
- Total assets: $7.49 billion (US dollars)
- 32.4 percent of total assets are represented by cash
- Stock performance over one year: -6 percent
9. Autodesk (ADSK)
- Total amount owed: $0
- $1.51 billion in cash and short-term investments
- 3 billion, 320 million dollars in total assets
- As a percentage of total assets, cash accounts for 45.6 percent
- Stock performance over one year: -9 percent
10. Master Card (MA)
- Total amount owed: $0
- $5.18 billion in cash and short-term investments
- Approximately $11.13 billion in total assets
- Cash as a proportion of total assets: 46.5 percent
- Performance of the stock during one year: 42 percent
