This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 High-Quality, Low-Risk Stocks

MILLBURN, N.J. ( Stockpickr) -- Over the years have been consistent in the themes that I apply to my fundamental research. I tend to foucs on earnings growth at a reasonable price, a strong balance sheet and financial condition, and dividends -- though not always at the same time.

This week, I'm combining these themes to seek out the best companies that fit the following criteria:

  • Earnings-per-share revisions greater than the S&P 500 over the past month. I used the past month because that captured the heart of earnings season.
  • Price-to-earnings ratio less than that of the S&P 500 on a market-capital-weighted average.
  • Standard & Poor's credit rating of BBB or better; I was only interested in investment-grade companies.
  • Dividend yield greater than the S&P 500 dividend yield, which now stands at about 2.2%.
  • >>11 Worst-Run Companies of 2011

    The search, using the Bloomberg Professional Service, yielded 14 results based on those criteria. To refine that list, I decided to apply some disciplined analysis over and above those results.

    The first decision that I made was to exclude those stocks of financial companies because, as we have seen, with sovereign debt, banks, broker-dealers (witness what just happened with MF Global (MFGLQ: Pink Sheets), insurance companies and other financial institutions, the credit ratings agencies have a poor track record and are unreliable.

    I then carefully went through the data to insure accuracy of the data points, double-checking with other informational sources such as Telemet Orion, Yahoo! Finance and company financial reports. This process knocked out nine companies from the search results.

    Let's take a closer look at the following five high-quality stocks at reasonable valuations.
    1 of 6

    Check Out Our Best Services for Investors

    Action Alerts PLUS

    Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    Quant Ratings

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    Stocks Under $10

    David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    14-Days Free
    Only $9.95
    14-Days Free

    Check Out Our Best Services for Investors

    Dividend Stock Advisor

    David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Updates with exact steps to take - BUY, HOLD, SELL
    Trifecta Stocks

    Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

    Product Features:
    • Model Portfolio
    • Intra Day Trade alerts
    • Access to Quant Ratings
    Real Money

    More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

    Product Features:
    • Access to Jim Cramer's daily blog
    • Intraday commentary and news
    • Real-time trading forums
    GD $145.56 0.00%
    HUB.B $99.64 0.00%
    INTC $34.46 0.00%
    NSC $95.38 0.00%
    TWX $69.78 0.00%


    Chart of I:DJI
    DOW 17,798.49 -14.90 -0.08%
    S&P 500 2,090.11 +1.24 0.06%
    NASDAQ 5,127.5250 +11.3820 0.22%

    Free Reports

    Top Rated Stocks Top Rated Funds Top Rated ETFs