There's no easy answer to this...
Its all about the stability of cash flow relative to the debt level of the company. Plenty of companies significantly reduced their leverage from 2007 to 2011 and plenty of companies are in industries where they've grown significantly while their debt filled competitors failed.
The complete implosion of the European debt market has kept long term rates down very low. I own Costco stock, they've decided to go from debt free to perpetually carrying about $3bil in debt (against a company with a $72bil enterprise value). They pay back some of the debt over three years, then re-borrow and pay a special dividend and have done this three times over the last six years.
You can increase returns by reducing equity and increasing debt, but you increase risk to the equity holders.
If you are an index investor, care more about the 2nd piece than the first. If you're an individual stock investor, you have to watch the balance sheet/leverage closely.