The Most Debt-Laden Companies in the S&P 500

In recent months, numerous firms have been bolstering their balance sheets, but during the financial crisis, overleveraging was the kiss of death for many companies.

Just as companies with zero debt on their books must be approached with caution, a company with a relatively heavy debt load isn’t necessarily in bad shape. Some companies may carry debt as a result of acquisitions or choose to maintain liquid investments instead of paying off what it owes. Another reason for borrowing in this environment is to take advantage of low interest rates paid on corporate bonds to secure low-cost financing.

However, as you can see from the historical data in the pages that follow, high debt doesn’t necessarily translate to a drop in stock price.

With data from Capital IQ, drawn from the most recent quarterly statements from across the S&P 500, the companies displayed here have the highest total debt as a percentage of total assets. The companies presented are the ones with the highest debt loads in their sector, as firms in some parts of the economy inherently hold more debt than others.

So, which companies carry the heaviest debt loads in their sector? Click ahead for the industry outliers.

By Giovanny Moreano & Paul Toscano
Posted 13 Aug 2010

Ford Motor (F)
Total Debt as a % of Total Assets: 67.8%
Sector Avg: 24.6%
Total Debt: $130.1 billion

Cash and ST Investments: $34.7 billion
Net Debt: $95.4 billion
YTD stock price performance: +31%

Historical Debt and Share Price, Per Year
2009: $132.4 bln total debt, +337% share price
2008: $152.6 bln total debt, -66% share price
2007: $168.8 bln total debt, -66% share price

Clorox (CLX)
Total Debt as a % of Total Assets: 63.6%
Sector Avg: 33.4%
Total Debt: $3 billion

Cash and ST Investments: $241 million
Net Debt: $2.8 billion
YTD stock price performance: +8%

Historical Debt and Share Price, Per Year
2009: $3.2 bln total debt, +10% share price
2008: $3.5 bln total debt, -15% share price
2007: $2.0 bln total debt, +2% share price

El Paso (EP)
Total Debt as a % of Total Assets: 60.5%
Sector Avg: 22.3%
Total Debt: $14 billion

Cash and ST Investments: $715 million
Net Debt: $13.3 billion
YTD stock price performance: +29%

Historical Debt and Share Price, Per Year
2009: $13.87 bln total debt, +26% share price
2008: $13.91 bln total debt, -55% share price
2007: $12.81 bln total debt, +13% share price

Sallie Mae Corp (SLM)
Total Debt as a % of Total Assets: 93.7%
Sector Avg: 24.6%
Total Debt: $194 billion

Cash and ST Investments: $6.3 billion
Net Debt: $188 billion
YTD stock price performance: +9%

Historical Debt and Share Price, Per Year
2009: $155.8 bln total debt, +27% share price
2008: $157.9 bln total debt, -56% share price
2007: $146.8 bln total debt, -59% share price

Tenet Healthcare (THC)
Total Debt as a % of Total Assets: 54.6%
Sector Avg: 19.7%
Total Debt: $4.3 billion

Cash and ST Investments: $713 million
Net Debt: $3.6 billion
YTD stock price performance: -16%

Historical Debt and Share Price, Per Year
2009: $4.27 bln total debt, +369% share price
2008: $4.78 bln total debt, -77% share price
2007: $4.77 bln total debt, -27% share price

General Electric (GE)
Total Debt as a % of Total Assets: 65.3%
Sector Avg: 24.4%
Total Debt: $489.7 billion

Cash and ST Investments: $73.9 billion
Net Debt: $415.9 billion
YTD stock price performance: +8%

Historical Debt and Share Price, Per Year
2009: $510.2 bln total debt, -7% share price
2008: $523.8 bln total debt, -56% share price
2007: $514.1 bln total debt, -0.4% share price

Linear Technology (LLTC)
Total Debt as a % of Total Assets: 80%
Sector Avg: 13.3%
Total Debt: $1.29 billion

Cash and ST Investments: $1.02 billion
Net Debt: $270.9 million
YTD stock price performance: +5%

Historical Debt and Share Price, Per Year
2009: $1.4 bln total debt, +38% share price
2008: $1.7 bln total debt, -31% share price
2007: $1.7 bln total debt, +5% share price

Owens-Illinois (OI)
Total Debt as a % of Total Assets: 41.9%
Sector Avg: 26.9%
Total Debt: $3.5 billion

Cash and ST Investments: $683 million
Net Debt: $2.8 billion
YTD stock price performance: -18%

Historical Debt and Share Price, Per Year
2009: $3.6 bln total debt, +20% share price
2008: $3.3 bln total debt, -45% share price
2007: $3.7 bln total debt, +168% share price

Frontier Communications (FTR)
Total Debt as a % of Total Assets: 70.7%
Sector Avg: 47.6%
Total Debt: $4.8 billion

Cash and ST Investments: $231.2 million
Net Debt: $4.6 billion
YTD stock price performance: -1%

Historical Debt and Share Price, Per Year
2009: $4.80 bln total debt, -11% share price
2008: $4.73 bln total debt, -31% share price
2007: $4.74 bln total debt, -11% share price

AES Corp (AES)
Total Debt as a % of Total Assets: 49.4%
Sector Avg: 35.3%
Total Debt: $20.1 billion

Cash and ST Investments: $4.6 billion
Net Debt: $15.5 billion
YTD stock price performance: -17%

Historical Debt and Share Price, Per Year
2009: $20.3 bln total debt, +62% share price
2008: $17.7 bln total debt, -61% share price
2007: $18.0 bln total debt, -3% share price