As interest rates flare, companies with a disproportionate amount of debt on their balance sheets may be due for a reckoning. In recent months, investors have seen Treasury prices fall and yields rise. Just this week, benchmark 10-year Treasury yields skyrocketed to 16-year highs , having climbed above 4.80% from 4.00% less than two months ago. New data from the Labor Department on Thursday showing an enduringly robust labor market did nothing to raise hopes that yields will settle down soon.
To find the stocks that could be vulnerable, CNBC screened for companies that meet the following criteria: higher borrowing costs, characterized by a debt-to-equity ratio greater than 150%; falling earnings, characterized by a one-year negative earnings growth outlook; and that are already breaking down, characterized by share prices trading within 5% of a 52-week low.