This list of companies selected for top financial strength characteristics could be valuable to do-it-yourself, conservative, risk averse individual stock or bond investors, as a starting place to begin looking for suitable opportunities.

From the thousands of companies available in the US, this list of 38 companies represents some of those with the greatest fundamental financial strength.

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To develop the list we identified those companies rated in all of these three ways:

(1) better than B+ for Earnings and Dividends Strength by S&P,

(2) better than B++ for Financial Strength by Value Line

(3) pay some level of current dividend, have a tangible equity, and long-term debt less than 1/2 of book equity.

There are many other strong companies, but having two noted analytical firms (one qualitative in approach and the other quantitative in approach) rate them highly for financial strength, plus imposing several specific fundamental criteria, should create a fairly high comfort factor with the list as a research starting point.

There were 91 companies that both S&P and Value Line rated highly.  That list was reduced to 38 by adding the current dividend, tangible equity and limited long-term debt criteria.

For those investors who are quite concerned about the ability of a company to survive the current economic situation and unprecedented political intervention in the free market, only the financially strong companies can offer some amount sleep insurance.

These companies may or may not offer great gains opportunities, but today return OF capital is a greater focus by some investors than return ON capital.

This list is not a set of investment recommendations, nor a comprehensive list of potentially interesting companies, but it is a set of companies recommended for closer examination by those with low tolerance of insolvency risk, and a concern about their holdings being comparatively bankruptcy remote.

We have not done a review of the “story” behind each company and some may turn out to be clunkers, but we think it is a good research starting list for conservative do-it-yourself investors interested in individual companies instead of funds.

Richard Shaw
QVM Group LLC

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