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4 AAA Rated Dividend Payers

February 5, 2012

US financial markets are off to a rousing start in 2012 with the Dow up 5.5%, the S&P 500 up 7.1% and the Nasdaq notching a YTD gain 11.5% (as of Feb 3, 2012).  What’s behind these gains?  Investors are starting to believe that a recovery is underway in the domestic economy, forward looking statements from big cyclical companies like Caterpillar (CAT) suggest that the emerging economies are back in growth mode and lately, the blowout quarter from Apple (APPL) and prospects for the Facebook IPO have ignited the tech sector powering the Nasdaq average higher.

Perhaps you’re not quite convinced that it’s OK to hoist the all clear flag.  Maybe you think that before the history is written for 2012 we will suffer a setback thanks to the Euro crisis.  Yes, the ECB has stepped in to address liquidity concerns for the European banks but you’re not ready to concede that the crisis has been averted and that it won’t affect the US economy.

But you’re a dividend investor and want to be invested.  However, you also want a measure of downside protection.  I would suggest that you could do no better than to look to the only AAA rated companies in the US, Automatic Data Processing (ADP), Exxon (XOM), Johnson & Johnson (JNJ) and Microsoft (MSFT).  Yes, the AAA rating relates to the debt of these companies reflecting the sterling nature of their balance sheets, but it is a noteworthy factor when looking for rock solid businesses.

The full article can be viewed on Seeking Alpha.


From → Dividends, Stocks

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