Another theory to investing is to examine the total return of the company and if it reinvesting in the company. Did the company make money and is it expected to make money again next year? Ian Tam of Morningstar used his data base to look at S&P companies and the criteria he used was:

latest return of total assets

trailing return of equity (ROE)

reinvestment rate relative to the sector median (higher numbers preferred)

must be in the S&P 500 total return index

Company                      Mkt Cap       Return on      ROE        Ind Rel                      Dividend
($ Bil)          Total Assets                    Re-Invest Rate        Yield

Seagate Technology    13.578         11.3%              59.9%        26.8%                     5.5%

KLA-Tencor                  15.004          17.2                133.0           54.3                        2.3

Celgene                          96.608          14.6                 71.0             60.0                       0.0

Home Depot                176.396          18.1                135.9         115.3                       2.4

Delphi Auto                    20.241         13.8                   72.4          44.7                         1.5

Monsanto                         50.570        11.8                  52.5             6.7                     1.9

Sherwin-Williams           28.858       17.0                  86.9            37.4                     1.1

Mettler-Toledo Ind           12.370      17.8                  77.3            82.8                     0.0

Hershey                             23.168        16.9               111.4            59.6                     2.3

MasterCard                      120.802       21.8                  70.6            51.0                    0.8

Mr. Tam had 15 on his list the other companies were Intuit, Newfield Exploration, S&P Global, Clorox and CBOE Holding.

Linking to dividend paying stocks, if a company can earn a profit and reinvest in the business, in is doing something right. The task is to look at alternatives to pick the best company and let the management continue to do the good things they are doing. These lists allow you to see other company names you may or may not have heard about to ensure you are not too bias in your investment picks.

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