2 Low-Debt, High-Yield Stocks You Shouldn’t Miss

When you think about dividend-paying stocks, it’s easy to picture big companies with big debt loads. But the real winners for income investors are often those that not only deliver attractive yields but also keep their balance sheets lean. In other words—companies that reward shareholders without borrowing heavily to do so.

That’s where New Hope Corporation (ASX: NHC) and Bisalloy Steel Group (ASX: BIS) stand out. Both companies operate in very different industries, but they share two traits that make them extremely appealing: low debt and high dividends. Let’s dive into the numbers and see why they deserve a spot on your watchlist.

New Hope Corporation (NHC): Coal Cash Keeps Flowing

New Hope is one of Australia’s most consistent thermal coal producers. While coal isn’t the flashiest sector, New Hope has shown remarkable financial discipline and continues to generate shareholder value.

1. Dividend yield: As of FY2025, New Hope boasts a dividend yield of 9.3%, far above the market average. Importantly, this payout is supported by both earnings (around 61%) and operating cash flow (about 70%), meaning dividends are backed by real profits—not debt.
2. Debt profile: The company’s debt-to-equity ratio is just 13.6%, which is impressively low for a mining business where heavy borrowing is the norm.
3. Cash position: New Hope holds a healthy $807 million in cash, giving it the flexibility to ride out coal price cycles and continue rewarding shareholders even in tougher years.
4. Dividend history: Over the past decade, New Hope hasn’t just maintained dividends—it has steadily grown them, creating compounding returns for investors who’ve stayed the course.
5. Outlook: Despite softer coal prices this year, New Hope’s strong cash position and minimal debt mean it can comfortably sustain its dividends. The company also has the option to pursue share buybacks, enhancing shareholder returns further.

For income-focused investors, New Hope is the classic “cash cow”: a business with stable earnings, low debt, and a track record of distributing wealth directly to shareholders.

Bisalloy Steel Group (BIS): Niche Steel, Big Dividends, Almost No Debt

While New Hope thrives in the resources sector, Bisalloy Steel Group is carving its own path in manufacturing. Known for its high-strength, wear-resistant steel products, Bisalloy serves niche markets like defense, mining, and construction. And it’s doing so while keeping debt near zero.

1. Dividend yield: On a trailing basis, BIS offers a 7.9% yield, with forward estimates closer to 8%. For an industrial stock, that’s outstanding.
2. Debt profile: The company carries virtually no net debt, a rarity in manufacturing where heavy machinery often drives large borrowings.
3. Profit performance: FY2025 saw net profit jump 24.4% year-on-year to $19.6 million. While revenue was relatively flat, better margins and efficiency gains boosted profitability.
4. Dividend history: Bisalloy declared a 16.5 cents fully franked final dividend, taking total dividends for the year to 24.5 cents per share. Even more impressive, dividends have grown at a 30% compound rate over the past three years.
5. Upcoming payout: Investors should note the next ex-dividend date—22 September 2025, with payment scheduled for 3 October 2025. With strong profits and a clean balance sheet, dividends look well-supported.

Bisalloy represents the kind of under-the-radar small-cap that income investors dream about: disciplined financial management, strong profit growth, and consistent dividend increases.

Why These Two Stand Out

New Hope and Bisalloy may be in very different sectors—coal mining and specialty steel—but they share financial discipline that sets them apart.

1. Low debt: Both companies have kept borrowing to a minimum, reducing financial risk.
2. Strong cash positions: This allows them to keep paying dividends even when markets turn volatile.
3. Sustainable yields: Their dividends aren’t fueled by borrowing but by earnings and cash flow.
4. Proven track record: Both have histories of rewarding shareholders with consistent or growing dividends.

For investors, that combination is rare and valuable. It means income you can rely on without the hidden risk of debt-heavy balance sheets.

Risks to Keep in Mind

No investment is without risk, and it’s important to be aware of what could impact these two companies.

1. Coal prices: New Hope’s earnings remain tied to coal prices, which are subject to global demand and regulatory pressures. If prices fall significantly, profits (and dividends) could shrink.
2. Demand cycles: Bisalloy’s niche steel products depend on industries like defense and construction. A slowdown in these sectors could hit sales and profitability.
3. Global economic conditions: Both companies are exposed to global trade and commodity cycles. While low debt insulates them somewhat, broader market downturns could still impact results.

The key difference, though, is that low debt gives both companies flexibility. They’re less vulnerable to interest rate rises and credit squeezes, making them better positioned than debt-heavy peers.

Bottom Line

If you’re an investor chasing big dividends without the baggage of big debt, both New Hope Corporation (ASX: NHC) and Bisalloy Steel Group (ASX: BIS) deserve serious attention.

1. New Hope is the dependable cash generator, using coal profits and strong reserves to deliver one of the market’s highest yields.
2. Bisalloy is the small-cap growth story that’s quietly becoming a dividend machine, all while keeping its balance sheet squeaky clean.

Together, they prove that the best dividend stocks don’t have to borrow their way to success. Instead, they use strong earnings, low debt, and disciplined management to keep delivering for shareholders.

For income-focused investors, these two companies tick all the right boxes: reliable, sustainable, and rewarding. And in a market where true dividend stability is rare, that’s exactly what makes them stocks you shouldn’t miss.

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