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Chicago, IL – December 2, 2025 – Stocks in this week’s article are Life Time Group Holdings, Inc. LTH, Cardinal Health, Inc. CAH, LeMaitre Vascular, Inc. LMAT and Flowserve Corp. FLS.
An ill-informed investor can easily lose money by betting on a stock solely based on the numbers flashing across a real-time screen. As we move toward 2026, this risk becomes even more pronounced, with the market navigating inflationary pressures, shifting rate expectations, geopolitical uncertainties and uneven sectoral growth. Against such a backdrop, a deeper evaluation of a company's financials is essential to make informed investment decisions.
Too often, investors gauge a company's performance by looking only at headline sales or earnings. What these numbers don't reveal is whether a company's fundamentals are strong enough to meet its financial obligations in a tighter, more rate-sensitive environment. That's where coverage ratios become invaluable. A higher coverage ratio signals a stronger capacity to service debt and sustain operations, making it a critical indicator of financial stability for investors seeking safer opportunities heading into 2026.
Life Time Group Holdings, Inc., Cardinal Health, Inc., LeMaitre Vascular, Inc. and Flowserve Corp. have impressive interest coverage ratios.
The interest coverage ratio is used to determine how effectively a company can pay interest charges on its debt.
Debt, which is crucial to financing operations for the majority of companies, comes at a cost called interest. Interest expense has a direct bearing on the profitability of a company. The company's creditworthiness depends on how effectively it meets its interest obligations. Therefore, the interest coverage ratio is one of the important criteria to factor in before making any investment decision.
Interest Coverage Ratio = Earnings before Interest & Taxes (EBIT) divided by Interest Expense.
The interest coverage ratio suggests how many times the interest could be paid from earnings and gauges the margin of safety a firm has for paying interest.
An interest coverage ratio lower than 1 suggests that the company is unable to fulfill its interest obligations and could default on repaying debt. A company capable of generating earnings well above its interest expense can withstand financial hardships. One should also track the company's past performance to determine whether the interest coverage ratio has improved or worsened over time.
Here are four of the 11 stocks that qualified the screening:
Life Time Group, the nation's premier healthy lifestyle brand, carries a Zacks Rank #2. The company has a trailing four-quarter earnings surprise of 22.4%, on average. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Life Time Group's current financial-year sales and EPS implies growth of 13.8% and 57.9%, respectively, from the year-ago period. Life Time Group has a VGM Score of A. Shares of Life Time Group have risen 16.5% in the past year.
Cardinal Health, a global healthcare company that distributes pharmaceuticals, manufactures and supplies medical and laboratory products, carries a Zacks Rank #2 and has a VGM Score of A. CAH has a trailing four-quarter earnings surprise of 9.4%, on average.
The Zacks Consensus Estimate for Cardinal Health's current financial-year sales and EPS indicates growth of 16.2% and 19.7%, respectively, from the year-ago period. The stock has soared 73.3% in the past year.
LeMaitre Vascular, a provider of vascular devices, implants, and services, carries a Zacks Rank #2 and has a VGM Score of B. The company has a trailing four-quarter earnings surprise of 2.5%, on average.
The Zacks Consensus Estimate for LeMaitre Vascular's current financial-year sales and EPS calls for growth of 12.9% and 30.1%, respectively, from the year-ago period. The stock has declined 21.3% in the past year.
Flowserve, a leading provider of flow control products and services for the global infrastructure markets, carries a Zacks Rank #2 and has a VGM Score of B. The company has a trailing four-quarter earnings surprise of 10.5%, on average.
The Zacks Consensus Estimate for Flowserve's current financial-year sales and EPS suggests growth of 4.6% and 31.9%, respectively, from the year-ago period. The stock has advanced 17.2% in the past year.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2797531/4-stocks-with-high-coverage-ratios-offer-safer-bets-going-into-2026
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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