NEW YORK (
) -- Companies struggle with debt in the same way families across the U.S. do, with some managing it better than others. If a company is profitable, its funding mix may not have an impact.
But for investors on the hunt for inexpensive stocks, debt can be a serious overhang if a company is too overleveraged. The following 10 large-cap stocks, ranked by total debt load, have a market cap above $1 billion and trade below $5.
is a dry-bulk shipping company based in Greece. The stock has fallen more than 30% in 2010 and more than 45% over the last year.
: $3.89 (June 9)
: $2.62 billion
Debt to Equity Ratio
: Much like its country of origin, DryShips is working to manage its debt load the best it can. In the most recent quarter, DryShips reduced both its long-term and short-term debt, although the company is still staring down a large maturity in 2013. The company has seen its stock plummet recently due to continued uncertainty about the initial public offering for its drilling spinoff following the Gulf of Mexico oil spill.
is a packaging solutions provider for food, beverages, and other consumer products. Shares are down 13% year to date but are up nearly 40% over the last 12 months.
: $2.96 (June 9)
: $2.80 billion
Debt to Equity Ratio
: Graphic Packaging has steadily reduced its total debt over the last several quarters, dropping to $2.8 billion at the end of the first quarter of 2010 from more than $3.22 billion at the end of the first quarter of 2009. Last month, Fitch Ratings upgraded the company's senior secured debt ratings, although they still retain "junk" status. Both 2013 and 2014 will be big years for the company in terms of debt, with more than $2.7 billion set to mature.
is the satellite radio provider that flirted with disaster in early 2009 before shares roared back more than 800%, bringing the stock back above the $1 threshold.
: 96 cents (June 9)
: $3.89 billion
: Detractors of Sirius XM will almost always point out the satellite radio company's debt load. But Sirius XM CEO Mel Karmazin has done his best to manage the company's total debt of nearly $4 billion. In April, Sirius XM retired $114 million of its debt, and in March, the company offered $800 million in 8.75% notes due 2015 to redeem $500 million in notes due 2013 and to repay $244 million under a senior secured term loan due 2012. Short-term debt was on the rise in the first quarter of 2010, though, and total debt of $3.89 billion is up from $3.33 billion in the year-ago quarter. Sirius XM faces its biggest debt maturity ($1.3 billion) in 2013.
is a commercial lender that is up nearly 2% in 2010 but has fallen more than 6% over the last 12 months. The specialty lender acquired MainStreet Lender in April for a total purchase price of $100 million.
: $4.04 (June 9)
: $4.56 billion
: While $4.56 billion in total debt may be staggering to some risk-averse investors, CapitalSource has worked to slice that number nearly in half from a year ago. At the end of the first quarter in 2009, CapitalSource carried a whopping $7.91 billion in total debt on its balance sheet. While the maturity schedule above shows only $600 million for 2012 and $300 million for 2014, CapitalSource has maturities in 2034 and 2037 of $378 million and $340 million, respectively.
of San Juan, Puerto Rico has seen its stock rise 16.8% in 2010. The company recent acquired $9.4 billion in assets from the failed
Westernbank Puerto Rico
: $2.64 (June 9)
: $5.04 billion
: Popular is another case in which a significant amount of debt won't mature until decades from now, which forces the company to pay millions in interest in the interim. Popular has small maturities due in 2010, 2011, 2012, 2013, 2014 and 2017, with a massive $935 million set to mature in 2049. Popular also has worked to lower its total debt amount over the last year, cutting $6.31 billion in total debt at the end of the first quarter of 2009 to just over $5 billion at the end of the most recent quarter.
rumored takeover target
, has seen its share price slide more than 25% in 2010 and 30% in the last year.
: $1.11 (June 9)
: $6.37 billion
: N/A (Rite Aid has negative total equity)
: Rite Aid will see a bulk of its debt mature over the next several years, with more than $1 billion due in 2012, 2014, 2015 and 2017. Rite Aid has seen its debt load steadily increase, rising to $6.37 billion at the end of the most recent quarter from $6.01 billion at the end of the year-ago quarter. The drug chain continues to struggle, with May same-store sales falling 1.7%, a bigger drop than analysts had predicted.
Level 3 Communications
is an integrated communications services company dealing primarily with fiber networks. Shares have tumbled 26% in 2010 and are flat over the last 12 months. When reporting first-quarter earnings last month, Level 3 said it expects capital expenditures to increase in this year. and it expects to be free cash flow negative for the full year.
: $1.13 (June 9)
: $6.42 billion
: Level 3 has done little to shed debt over the last several quarters. The company ended the first quarter of 2010 with $6.42 billion in debt, nearly unchanged from $6.43 billion at the end of the year-ago quarter. Level 3's debt maturities stretch out only to 2018, but nearly $3 billion is set to mature in 2014.
has faced stiff competition from both
, although the wireless provider is looking to reverse its fortunes with the launch of the
phone. The stock is up 26% in 2010, but has fallen nearly 7% over the previous 12 months.
: $4.61 (June 9)
: $21.05 billion
: Sprint Nextel has shaved its long-term debt to $18.64 billion at the end of the first quarter of 2010 from more than $20 billion at the end of the year-ago quarter. Unfortunately, short-term debt doubled to $2.41 billion in the recent quarter. Sprint has $750 million in debt set to mature in 2010, followed by $14.27 billion over the next five years.
is quite often the most heavily traded U.S. stock, with an average daily share volume of more than 810 million. Recently, the Treasury Department began selling its Citigroup stake, which was acquired as part of the Troubled Asset Relief Program, or TARP. The bank's stock has famously failed to maintain the $5 level, although shares are up nearly 20% in 2010.
: $3.87 (June 9)
: $882.05 billion
: Citigroup is a rare animal due to the Treasury Department's equity stake, which it is currently working to shed. Citigroup's total debt has certainly been building, up to $882 billion at the end of the first quarter of 2010 from $747 billion in the year-ago quarter, but that's down from $1.01 trillion at the end of 2008's first quarter. Citigroup's debt distribution shows that a bulk of its debt (nearly $200 billion) is set to mature over the next five years.
>>Video: Citigroup Stock Could Triple
( FNM), one of the so-called
, has been a volatile stock over the last several months, especially after Treasury Secretary Timothy Geithner offered vague plans for reforming Fannie and counterpart
: 91 cents (June 9)
: $3.26 trillion
: N/A (Fannie Mae has negative total equity)
: Fannie Mae's multitrillion debt load comes courtesy of a first-quarter explosion of long-term debt of consolidated trusts, which ballooned to $2.47 trillion from $6.17 billion at the end of the fourth quarter of 2009. Last month, Fannie Mae said it has a net worth deficit of $8.4 billion and it has asked for more money from the Treasury to cover continued losses. This came as the mortgage finance giant posted a first-quarter loss of $13.1 billion, or $2.29 a share.
Buy-Rated Stocks Top 10 Buy-Rated Stocks Under $5
-- Written by Robert Holmes in Boston
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