Steady-Eddie Stocks at Good Prices

Oftentimes it is the high risk/high reward stocks that are the most talked about. Will  BP (BP) be able to survive the Gulf Oil disaster? Will a biotech's novel new drug get approved? Will a tech firm's new product be the next big thing?

But what about low risk/high reward stocks? These are companies that might not be making headlines every day but that have steady, predictable businesses and that have become cheap for one reason or another. Oftentimes the marketplace believes the risks surrounding the company are greater than they actually are, or the firms are getting painted with a broad brush

To find these low risk/high reward stocks, we used Morningstar's  Premium Stock Screener. We looked for stocks that have a low fair value uncertainty rating, a narrow or wide economic moat, and that have a 5-star rating. To see the complete list, run the screen for yourself  here.

Many of the firms that passed are large pharmaceutical firms like  Abbott Labs (ABT) and  Johnson & Johnson (JNJ) that sold off over health-care reform fears, among other issues. But our analysts think that these concerns are largely overblown, and that these firms will be able to solider on producing piles of cash that can be reinvested or returned to shareholders.

Of course no stock is without risk, but given these companies' long-term competitive advantages and bargain valuations, investors would be well served to see if they have a place in their portfolios.

Here's a closer look at a few names that passed the screen.

 Procter & Gamble (PG)
Moat: Wide | Projected Dividend Yield: 3.15%
From the  Premium Analyst Report:
Procter & Gamble's size confers tremendous benefits in terms of distribution, brand reach, and scale with suppliers, but the goliath was caught flat-footed in its response to the dramatic downturn in consumer spending. With a new CEO at the helm, however, P&G has implemented plans to reinvigorate top-line and earnings growth, and we remain confident that the household products stalwart will be able to reposition itself for a more challenging economy. At its core, P&G possesses unprecedented skills in consumer understanding, marketing, and brand-building and--the firm's slow reaction to the downturn notwithstanding--these skills haven't wavered.

 Spectra Energy Corporation 
Moat: Wide | Projected Dividend Yield: 4.69%
From the  Premium Analyst Report:
Spectra Energy is a pure play on natural gas demand. Its operations stretch across all links in the natural gas value chain, with the exception of riskier exploration and production. With large positions in gathering and processing, transportation and storage, and distribution, Spectra collects a large portion of economic rents paid to get gas to end users.

 Becton, Dickinson and Company (BDX)
Moat: Narrow | Projected Dividend Yield: 2.05%
From the  Premium Analyst Report:
Becton, Dickinson's needle and surgical tool empire has provided investors with robust returns on capital for years. Now, largely because of the company's decades-long dedication to innovation and wise deployment of capital, its business is prospering and its investors remain amply rewarded even in this challenging economic environment.

All data as of 6/17/10