Investing legend Warren Buffett famously said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”.
But what makes a wonderful company?
The answer to that question is likely to differ from investor to investor. But two things that are probably going to pop up regularly are a company that has low levels of debt and a company that can generate strong earnings growth.
The lower the debt, the healthier the balance sheet and more resilient a company can be during tough economic climates (like those we are arguably seeing in present times). Earnings growth is also a key driver of value and, as a result, company share prices. That’s why a company with the ability to consistently grow earnings often translates into rewarding outcomes for investors.
We built a Simply Wall St Screener to try to identify some of the top ASX stocks that exhibit both of these attributes. As you might expect, many quality companies made the list.
Qualitas (ASX:QAL)
Qualitas is an Australian alternative investment manager with a focus on real estate and private credit. It may not be a name that resonates with the average Australian, but its impact does (possibly without them even realising it).
According to estimates, between 10% and 12% of all multi-dwelling development projects in Australia are funded by Qualitas. That makes Qualitas one of the most influential companies in the country when it comes to property development and the critically important market that is Australian real estate. The fact that it also manages several funds with different investing mandates also helps it benefit from diversified earnings streams and exposure to different parts of the property market.
With a debt-to-equity ratio of 11.5% and a history of compounding earnings at over 20% per year over the last five years, it is a standout as one of the top ASX stocks with low debt and strong earnings growth.
Want to hear more about Qualitas? Check out the most followed Simply Wall St Narrative, which covers details such as Qualitas’ strong market share and its diversified revenue model.
Cochlear (ASX:COH)
There are few Australian success stories like Cochlear, both in terms of business success and impact on the world. Millions of people can now hear their loved ones' voices thanks to the devices made by Cochlear.
It is now the undisputed leader and gold standard when it comes to acoustic implants.
Although it should be noted that, the company has been facing some headwinds more recently.
In April, Cochlear reduced its expectations for the financial year, cutting its profit guidance by 30% due to softening demand in many of its international markets, including America, where low consumer sentiment appears to be affecting healthcare decisions. This led to Cochlear’s share price falling 41% in a single day.
Still, as an industry leader in an important global market, with a history of growing earnings by 18% per year for the last five years, and a balance sheet with almost no debt, it is still arguably one of the top ASX stocks that investors could consider when looking for companies with low debt and the ability to grow earnings.
Praemium (ASX:PPS)
Praemium offers one of the largest and most advanced wealth-building platforms in Australia, providing financial advisors and high-net-worth individuals with an efficient way to access global markets and manage their investments.
As at the end of June 2026, more than AU$77 billion of funds under administration flowed through its platform.
It has been one of the stand-out companies in the Australian financial services sector, compounding earnings by around 19.5% per year for the last five years, faster than its revenue growth during this time thanks to a low-cost business model. Praemium also continues to invest in innovation and building its product, which is why analysts continue to forecast strong growth in the years ahead.
Praemium is an Aussie fintech that has built one of the industry's largest wealth platforms. With a history of strong growth and high profitability, it’s no surprise it hasn’t required much debt to accomplish its expansion. Taken altogether, these characteristics are why Praemium is possibly one of the top ASX stocks with low debt and strong growth.
Strong Growth, Strong Health
Some companies can grow, but do so with high risk.
Other companies can be financially strong, but lack velocity in their growth.
However, in some rare cases, they can grow at an impressive rate while also keeping a healthy balance sheet.
It is the latter category that has helped long-term, quality-focused investors generate strong returns over many years.
As shown by the above three companies, a company that can do both doesn’t just happen by luck. It often requires the company to be a leader in its industry, and one that is managed extremely well over a long period of time.
If you are looking to see what other ASX stocks are growing with little debt and that score well on Simply Wall St’s value score, check out our Top ASX Stocks With Low Debt And Earnings Growth Screener.
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Simply Wall St analyst Andrew Legget and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.