Nine Ways to Find Great Stocks

To save you time, we've created nine stock screens that are always available within  Premium Stock Selector. One searches for companies with terrific 10-year records. Another searches for stocks with high dividend yields. Another for stocks Warren Buffett might like. When you enter the Selector, just click on the box labeled "Morningstar Screens." Choose the one you want, and--presto--you'll see the stocks that pass the screen.

Of these nine preset screens, the one that's turning up the most interesting names right now in my opinion is "Terrific 10-Year Records." To pass this screen, a company must have posted 10 straight years of rising sales in addition to positive earnings for all 10 of those years.

About 3% of our stock universe, or 240-odd stocks, currently pass this screen. (To see the complete list,  click here.) Among them, you'll find six stocks with Morningstar Ratings of 5 stars. As a reminder, a 5-star rating means that our estimate of the stock's fair value is well above the current stock price. Each of the 5-star stocks below, with the exception of American International Group (AIG), also lands on our  Stock Analyst Picks list, meaning they're among our favorite ideas in their respective sectors.

 American International Group (AIG)
From the Analyst Report: "We think AIG has some of the best economics and management in the insurance industry. This leading player is well worth owning at the right price."

 Capital One Financial (COF)
From the Analyst Report: "We think Capital One remains one of the most attractive investments in the financial services sector. It's rare that a company with a durable competitive advantage trades at a 40% discount--less than eight times forward earnings. We think it's worth $50."

 Home Depot (HD)
From the Analyst Report: "The dismal reaction to Home Depot's third-quarter results has provided a buying opportunity, in our opinion. We turned modestly positive on Home Depot's valuation in late summer for the first time in two years when the stock price dropped below $30, and think the stock now looks attractive in the low to mid-$20s."

 MBIA (MBI)
From the Analyst Report: "MBIA stands on firm ground and its shares look attractive to us. We estimate MBIA is worth $59 per share, assuming high-single-digit growth in net earned premiums and a combined ratio of 38%-44% from 2002 to 2006."

 McDonald's (MCD)
From the Analyst Report: "While we think it's unfair to blame all of the company's problems on Greenberg [the chairman and CEO, who recently announced he's stepping down], Wall Street did lose patience with him. His retirement should give the new management team, headed by Jim Cantalupo, a better opportunity to execute the company's strategies."

 Philip Morris (MO)
From the Analyst Report: "Even with all the challenges and risks Philip Morris faces, we think it is worth about $50 per share. It looks like a good buy below $40."