10 Low Debt Tech Stocks With Strong Corporate Governance

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 |  Includes: AAPL, ADTN, ALTR, CY, DIOD, EMC, INTC, ISS, MORN, MSFT, QSFT
by: Kapitall

It's important to remember that stocks represent ownership interests in companies run by real management teams. How well a company is run has big implications to its profitability and its ability to maintain a dividend yield.

One way to evaluate this is by looking at the corporate governance policies of the company, such as its board composition and shareholder rights.

Institutional Shareholder Services ((NYSE:ISS)) gives ratings for four areas of corporate governance, on risks related to: the board, the audit committee, the compensation committee, and shareholder rights.

We ran a screen on the tech sector for those receiving "low risk" ratings in all four corporate governance categories from ISS, as well as those with low debt (debt to equity ratios below 0.3).

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the top six stocks mentioned below. Analyst ratings sourced from Zacks Investment Research.‬

We also created a price-weighted index of the stocks mentioned below, and monitored the performance of the list relative to the S&P 500 index over the last month. To access a complete analysis of this list's recent performance, click here.

Do you think these stocks are poised to outperform? Use this list as a starting point for your own analysis.

List sorted by market cap.

1. Apple Inc. (NASDAQ:AAPL): Designs, manufactures, and markets personal computers, mobile communication and media devices, and portable digital music players, as well as sells related software, services, peripherals, networking solutions, and third-party digital content and applications worldwide. Market cap of $384.26B. Total debt/equity at 0. According to ISS, the company has "low concern" in all corporate governance categories. Might be undervalued at current levels, with a PEG ratio at 0.82, and P/FCF ratio at 12.78. The stock has gained 24.8% over the last year.

2. Microsoft Corporation (NASDAQ:MSFT): Develops, licenses, and supports a range of software products and services for various computing devices worldwide. Market cap of $230.49B. Total debt/equity at 0.20. According to ISS, the company has "low concern" in all corporate governance categories. The stock has had a couple of great days, gaining 5.22% over the last week.

3. Intel Corporation (NASDAQ:INTC): Engages in the design, manufacture, and sale of integrated circuits for computing and communications industries worldwide. Market cap of $127.86B. Total debt/equity at 0.15. According to ISS, the company has "low concern" in all corporate governance categories. Offers a good dividend, and appears to have good liquidity to back it up--dividend yield at 3.35%, current ratio at 2.24, and quick ratio at 1.91. The stock has gained 22.91% over the last year.

4. EMC Corporation (NYSE:EMC): Develops, delivers, and supports the information and virtual infrastructure technologies and solutions. Market cap of $44.53B. Total debt/equity at 0.19. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 5.5% over the last year.

5. Altera Corp. (NASDAQ:ALTR): Designs, manufactures, and markets programmable logic devices; structured application-specific integrated circuit devices; predefined design building blocks or intellectual-property cores; and associated development tools. Market cap of $11.93B. Total debt/equity at 0.18. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 3.54% over the last year.

6. Morningstar Inc. (NASDAQ:MORN): Provides independent investment research to investors worldwide. Market cap of $2.94B. Total debt/equity at 0. According to ISS, the company has "low concern" in all corporate governance categories. The stock has gained 11.73% over the last year.

7. Cypress Semiconductor Corporation (NASDAQ:CY): Operates as a semiconductor company in the United States and internationally. Market cap of $2.59B. Total debt/equity at 0.06. According to ISS, the company has "low concern" in all corporate governance categories. The stock has performed poorly over the last month, losing 10.29%.

8. ADTRAN Inc. (NASDAQ:ADTN): Designs, manufactures, markets, and services network access solutions that enable voice, data, video, and Internet communications across wireline and wireless networks worldwide. Market cap of $1.85B. Total debt/equity at 0.07. According to ISS, the company has "low concern" in all corporate governance categories. It's been a rough couple of days for the stock, losing 5.13% over the last week.

9. Quest Software Inc. (NASDAQ:QSFT): Designs, develops, markets, distributes, and supports enterprise systems management software products worldwide. Market cap of $1.52B. Total debt/equity at 0.04. According to ISS, the company has "low concern" in all corporate governance categories. The stock has lost 33.79% over the last year.

10. Diodes Incorporated (NASDAQ:DIOD): Makes and distributes standard semiconductor products to manufacturers in the consumer electronic, computer, communications, industrial, and automotive markets. Market cap of $971.25M. Total debt/equity at 0.01. According to ISS, the company has "low concern" in all corporate governance categories. This is a risky stock that is significantly more volatile than the overall market (beta = 2.16). The stock is a short squeeze candidate, with a short float at 14.04% (equivalent to 14.8 days of average volume). The stock has lost 21% over the last year.

*ISS ratings sourced from Thomson/First Call (via Yahoo! Finance), all other data sourced from Finviz.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.