Buyback Leaders with Top S&P Marks

These companies are actively repurchasing their own shares. And why not? Their stocks carry the highest S&P quality ratings

By David Braverman

The seven stocks below have a Standard & Poor's earnings and dividend ranking of A or A+. This indicates that each stock has at least 10 years of financial history with demonstrated growth in both earnings and dividends. To receive this ranking each of these stocks must pay a cash dividend. In addition, each of these stocks has a credit rating from Standard & Poor's Ratings Group of at least AA-. That's an indication of their superior financial strength: Each of these companies has substantial capacity to meet its obligations in the future.

Finally, each company has substantially repurchased its shares over the last year. While many companies may announce a stock buyback or simply repurchase shares only to quickly reissue them to satisfy stock option activity, these companies have actually reduced the number of shares outstanding by at least 1% over the last year. This usually signifies that the company believes its shares have been undervalued by the marketplace.

Here are the seven stocks that emerged:

Bristol Myers Squibb (BMY )

Colgate Palmolive (CL )

Hewlett-Packard (HWP )

Imperial Oil (IMO )

Jefferson Pilot (JP )

McDonalds (MCD )

Pitney-Bowes (PBI )

Braverman is a senior investment officer with Standard & Poor's

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