These 4 Retailers Are 'A Model' For Others, Barclays Says

In a report issued Wednesday, Barclays analysts Alan M. Rifkin and Sam Reid look into U.S. hardline retailers, and the "further opportunity to lever up." The analysts think that these retailers "seem to be well positioned to use maturity to their advantage."

While maturity for most retailers means slower growth, it also means stronger balance sheets and a more predictable cash flow. "This, coupled with very attractive interest rates for borrowing and additional debt capacity for many," leads the firm to conclude that many of these retailers "have additional capacity on their balance sheets to lever up in order to drive shareholder value."

After examining debt structures, Barclays could point out the "best and least positioned to drive shareholder returns through incremental leverage and balance sheet management."

The firm highlights four retailers currently using its balance sheets to substantially increase returns: AutoZone, Inc. (NYSE: AZO), Home Depot Inc (NYSE: HD), Lowe's Companies, Inc. (NYSE: LOW) and O'Reilly Automotive Inc (NASDAQ: ORLY). They call these retailers "a model for others."

"However, even these ROIC ‘leaders' still have additional opportunities, making them even more attractive longer term," the analysts add.