S&P Equity Research Services Publishes Quality Trends, an In-Depth Analysis of 'Quality' in the Equity Markets

NEW YORK, Nov. 8, 2010 /PRNewswire/ -- Standard & Poor's Equity Research Services believes that U.S. stocks are moving from a bull market dominated by low Quality Ranking names to one in which low Quality Ranking and high Quality Ranking (QR)** issues are more evenly balanced, according to the latest issue of  the group's Quality Trends publication.

"With corporate earnings growth slowing sharply and valuation premiums on high versus low Quality Ranked stocks compressed, we recommend that investors consider purchasing high Quality Ranked stocks for projected long-term total return," said Richard Tortoriello, an S&P equity analyst and author of the report.  "In the U.S., we note that large capitalization, high QR stocks are generally more internationally diversified than low QR issues, providing investors, we believe, with a hedge against a falling U.S. dollar."

In addition, high QR issues offer a current average dividend yield of 2.6%, well above the 1.7% average yield offered by stocks in the equal-weighted S&P 500.***

This issue of Quality Trends also looks at International Quality Rankings (IQRs), which rank nearly 18,000 companies in over 100 countries.  The report surveys high QR issues globally, which, year to date through September 30, 2010, have been slightly outperforming high QR stocks in the U.S., as a group.  Of course, past performance is not an indication of future results.

The report includes various screens to help identify those high QR equities which might be considered for purchase.  Among the stocks identified in these screens are:  International Business Machines (NYSE: IBM); Chevron Corp. (NYSE: CVX); Johnson & Johnson (NYSE: JNJ); Intel Corp. (NNM: INTC); Target Corp. (NYSE: TGT); Lockheed Martin (NYSE: LMT); General Mills (NYSE: GIS); and Pfizer, Inc. (NYSE: PFE).

The report can be purchased by calling 1-877-219-1247 or via email at [email protected].

** Standard & Poor's defines high Quality Ranking issues (high QR) as those with S&P Quality Rankings of A+, A, and A- and low Quality Ranking issues (low QR) as those with S&P Quality Rankings of B, B-, C, and D.  Companies with a B+ Quality Ranking are considered average.  S&P Quality Rankings, also called S&P Earnings & Dividend Rankings, have been in use by long-term investors since 1956.

*** Data as of September 30, 2010.

About Standard & Poor's Equity Research Services

As the world's largest producer of independent equity research, Standard & Poor's licenses its research to global institutions for their investors and advisors.  Standard & Poor's team of experienced U.S., European and Asian equity analysts use a fundamental, bottom-up approach to assess a global universe of multi-asset class securities across industries worldwide.  Follow Standard & Poor's equity analysts' U.S. market commentary each day at http://www.equityresearch.standardandpoors.com/.

The equity research reports and recommendations provided by Standard & Poor's Equity Research Services are performed separately from any other analytic activity of Standard & Poor's. Standard & Poor's Equity Research Services has no access to non-public information received by other units of Standard & Poor's.  Standard & Poor's does not trade for its own account.  The analytical and ethical conduct of Standard & Poor's equity analysts is governed by the firm's Research Objectivity Policy, a copy of which may also be found at www.standardandpoors.com or by clicking here.

About Standard & Poor's

Standard & Poor's Financial Services, LLC, a subsidiary of The McGraw-Hill Companies (NYSE: MHP), is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data.  With offices in 23 countries and markets, Standard & Poor's is an essential part of the world's financial infrastructure and has played a leading role for 150 years in providing investors with the independent benchmarks they need to feel more confident about their investment and financial decisions.  For more information, visit www.standardandpoors.com.

SOURCE Standard & Poor's