When you look at investing there are many many choices, for most people, in order not to lose money, the list they need to look at should be a narrow one. Within the narrow list are many choices and very few of them will turn out to be a bad one, but things happen to all companies. In the Globe and Mail on Wednesday, Michael Bowman (mike@bowmangroup.com) looked to the criteria of companies that have a good credit rating as designated by Standard and Poor’s. The highest is AAA and Mr. Bowman started his criteria at A. This should mean companies can pay their debts.

The next step to narrow the field even more was to ensure the companies have a 3% dividend yield or better or the company makes profits.

Continuing the narrowing process is to look at the Return on Equity (ROE) and the number decided was greater than 10% which is how much profit does the company make for a dollar invested in percentage.

You can change any of the criteria, but when you have put all the above criteria together the the result is low risk companies which have a history of making money and retuning some to its shareholders. There never is no risk, but with this criteria you will notice a Return on Equity in the range from 11% to 38% with most in the high teens for Return on Equity. It is not surprising the shares went higher over the year. Next year it may not be as high, but in relative terms your risk is going to be lower than many other choices. The dividends will give you a base return on your investment, plus possible capital gains and you are looking at a solid investment. Which company do you start with is up to you, but your portfolio should have more of these type of companies in it for both the short term and long term.

The list Mr. Bowman and his team come up with found the largest and highest rated company on our list, at AA+, is General Electric Co., which makes everything from light bulbs to military engines.

McDonald’s Corp. has the highest ROE on our screen. The company serves 70 million people each and every day from its 35,000 restaurants in over 100 countries.

All of Canada’s Big Six banks made the list.

The highest P/E ratio belongs to Public Storage. The company owns and operates 2,200 self storage facilities in the United States and Europe.

Great-West Lifeco Inc., IGM Financial Inc. and Power Financial Corp. – all companies under the Power Corp. of Canada umbrella – also made the list.

Quality companies with credit ratings of ‘A’ or better

Company            Ticker  Market Cap   Dividend Yield  S&P   P/E  ROE

General Electric     GE-N    284.52        3.11      AA+   15.34    11.04
Chevron Corp      CVX-N    242.74        3.40      AA     10.34    15.00
Pfizer Inc             PFE-N    229.57        3.02       AA     14.17    32.27
Procter & Gamble PG-N    236.44         3.02       AA-    19.61    16.02
Cisco Systems CSCO-N   127.44         3.07       AA-    13.05    14.65
Royal Bank of Cdn RY-T  103.99         3.50       AA-     13.05   19.37
TD Bank                 TD-T    91.01         3.28       AA-     13.29    13.97
Eli Lily & Co          LLY-N   72.65          3.35       AA-     13.23    28.92
Intel Corp            INTC-Q 137.24         3.64         A+    13.31   17.58
Bk of Nova Scotia BNS-T  76.82         3.77          A+   12.48    16.37
Costco Wholesale COST-Q 55.72       7.17        A+     25.44   17.15
Bank of Montreal BMO-T  46.70          4.03         A+    11.33   14.96
CIBC                      CM-T  35.98          4.21        A+     10.83    20.84
Great-West Lifeco GWO-T 31.26        3.92        A+     14.51    16.67
Power Financial     PWF-T 24.83        4.02        A+     14.00    10.81
IGM Financial         IGM-T 13.54        4.00        A+      17.76    17.22
Public Storage        PSA-N 31.94       3.07        A        34.65    16.11
ConocoPhillips       COP-N 90.34       4.05        A        13.04    1 6.43
Sysco Corp           SYY-N 23.56         3.13        A        18.03    19.22
McDonald’s Corp MCD-N 106.95       3.27       A        17.41     38.45
KKR & CO LP      KKR-N 18.82         5.75       A       1.78        29.25
National Bank of Cda NA-T 14.18     3.92       A        9.43       20.67
Diamond Offshore DO-N 7.55           7.19        A       11.53      11.91
Questar Corp       STR-N  4.60          3.01       A        19.45     14.43
Piedmont Nat Gas PNY-N 2.92        3.63      A         18.61       12.13

There are more questions than answers, till the next time – to raising questions