Debt is an important factor to take into account when looking at stocks. High debt levels can be a red flag even if things seem to be going fine at the company. Sometimes all it takes is a small economic downturn to turn a happy company into one that can no longer make it's debt payments. Debt can act just like an anchor, slowing down a company keeping it from growing because all their money goes to interest payments and not to new factories or employees.
We prefer companies that have very little debt and are throwing off large amounts of cash. Some debt is ok and can even be a good thing if they are using the proceeds from the debt to expand their business and increase shareholder value.
Companies with small amounts of debt are positioned to handle economic swings much easier than companies with high debt. Why do companies go bankrupt? Because they can't make their debt payments. Well if a company does not have any debt and substantial cash flow the odds of that company going bankrupt are greatly reduced.
Remember, check the debt levels and maturities to determine if a stock is right for you.