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A view of the Exxon Mobil refinery in Baytown, Texas (Jessica Rinaldi/Reuters)
A view of the Exxon Mobil refinery in Baytown, Texas (Jessica Rinaldi/Reuters)

number cruncher

20 international stocks with high credit ratings Add to ...

What are we looking for?

Credit ratings are intended to provide a guide to the quality of a company’s debt, but they can also provide important clues about the attractiveness of a company’s stock, since firms with the highest credit ratings tend to be more financially stable than those lower down the scale.

More Related to this Story

Today, with the help of Jamie Hynes, sales director with S&P Capital IQ, we look around the world for companies with healthy credit profiles as well as other attractive characteristics.

How we did it

Under S&P’s credit rating system, grades range from AAA (extremely strong capacity to meet financial commitments) to BBB-minus (considered the lowest investment grade by market participants).

Last week, Mr. Hynes looked for Canadian companies with strong credit ratings. For today’s offering, he tweaked that screen, which combined Standard & Poor’s Entity Credit Ratings with S&P Capital IQ financial data, to search for companies on any major global exchange with AA- credit ratings or better.

Seventy-one stocks met this requirement, so he narrowed the search to companies with $1-billion or more in market capitalization, and:

  • a dividend yield of at least 2 per cent;
  • earnings that have grown over the past year;
  • a price-to-earnings ratio of no more than 15;
  • an average analyst recommendation of “hold” or better.

More about S&P Capital IQ

S&P Capital IQ offers a comprehensive set of tools for fundamental analysis of global securities as well as idea generation and workflow management. Its Web- and Excel-based platform provides access to both real-time and historical information on companies, markets, transactions and people around the world.

What we found

Twenty companies, including three Canadian banks, have a AA- credit rating or better and also meet our additional criteria. Their average price change, year to date, is 18.3 per cent – handily beating the 11.8 per cent return for the MSCI World Index.

As always, you should do your own research before buying any of the stocks listed here.

 

Follow on Twitter: @IanMcGugan

 

International stocks with the highest 'investment grade' credit rating

Company Name Ticker Country $ Price
(Dec. 11)
S&P Entity
Credit Rating*
Exxon Mobil Corp. XOM-N U.S. 87.28 AAA
Allianz SE ALV-GERMANY Germany 131.43 AA
Nippon Telegraph & Telephone 9432-TOKYO Japan 43.66 AA
Wal-Mart Stores Inc. WMT-N U.S. 71.23 AA
3M Company MMM-N U.S. 90.7 AA-
Australia & New Zealand Banking ANZ-AUSTR. Australia 25.73 AA-
China Mobile Limited 941-HK Hong Kong 11.28 AA-
CME Group Inc. CME-Q U.S. 53.37 AA-
Denso Corp. 6902-TOKYO Japan 32.08 AA-
East Japan Railway Co. 9020-TOKYO Japan 65.53 AA-
Hannover Ruckversicherung HNR1-GERMANY Germany 73.12 AA-
Munchener Ruckversicherungs MUV2-GERMANY Germany 169.78 AA-
Nordea Bank AB NDA-SEK-SWEDEN Sweden 9.09 AA-
Osaka Gas Co., Ltd. 9532-TOKYO Japan 3.87 AA-
Royal Bank of Canada RY-T Canada 58.51 AA-
Seven & I Holdings Co. 3382-TOKYO Japan 28.95 AA-
Swiss Re Ltd SREN-SWITZ. Switzerland 70.55 AA-
The Bank Of Nova Scotia BNS-T Canada 55.94 AA-
Toronto-Dominion Bank TD-T Canada 80.25 AA-
Tokyo Gas Co. Ltd. 9531-TOKYO Japan 4.82 AA-

* Long term local currency rating; ** Broker Recommendations: 1=Buy; 3=Hold; 5=Sell; Source: S&P Capital IQ

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