High-Quality Stocks for an Unsettled Market

No stomach for Wall Street's wild swings? Maybe it's time to stick with some proven winners -- like these Five-STAR stocks with top S&P quality rankings

By Arnie Kaufman

For investors who don't have the stomach for wild swings in the stock market, companies that have proven themselves over time offer the potential for a relatively smooth ride. We searched our database for issues that carry an S&P quality rank of A+ or A, which means they have compiled a record of ten years of superior earnings and dividend growth and stability.

This kind of track record -- and the cushion provided by dividends -- lessen the likelihood that the stocks will experience extreme ups and downs, even in a shaky market.

In addition, we screened for companies that our analysts expect to show earnings growth of at least 10% for 2001. All of the stocks, moreover, had to be ranked five STARS, indicating that S&P analysts rate them as buys and expect them to log above-average market performance over the next six to 12 months.

The following issues emerged:

Bank of New York (BK )

Bristol-Myers Squibb (BMY )

Citigroup (C )

Eaton Vance (EV )

Hershey Foods (HSY )

Kaydon Corp. (KDN )

MBNA Corp. (KRB )

Pfizer (PFE )

Philip Morris (MO )

Kaufman is editor of S&P's weekly investing newsletter, The Outlook

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