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Stock Strategist

Five Companies We Love

Check out this quintet of well-managed firms.

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As investors with access to around-the-clock cable television news and an ever-increasing amount of information on the Internet, it's all too easy to get distracted by the headlines we come across each day: quarterly earnings, new product launches, brokerage upgrades and downgrades, and daily gyrations in the market. Sometimes it pays to step back and ask some more-basic questions: Is it a good business? Is the management team on your side? These questions aren't easy to answer, but getting them right can make a huge difference in the quality of your portfolio over time.

For today's Stock Strategist, we focused on two of the more-qualitative aspects of stock investing, both of which are central to Morningstar's investment approach. First, we screened for companies that earn a Stewardship Grade of A, our highest grade. These grades are designed to measure how well company boards and management teams fare in demonstrating a commitment to shareholders and acting as stewards of investor capital. These grades are based on three key areas: transparency of reporting, shareholder friendliness, and overall stewardship, including management incentives and equity ownership. Morningstar's analysts have assigned Stewardship Grades to approximately 1,400 companies, 86 of which receive grades of A.

John Novak does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.