4 AAA Companies In AA America

Includes: ADP, JNJ, MSFT, XOM
by: Kraken

The S&P's downgrade of the U.S. has caused a major ripple effect in the markets. The indices have fallen substantially and companies that have strong ties with the government will likely take a beating. Here are the four AAA companies in America that will continue to be strong due to their rock solid balance sheets and strong cash flows.

Automatic Data Processing, Inc. (NASDAQ:ADP) provides business outsourcing solutions. The company operates in three segments: Employer Services, Professional Employer Organization Services, and Dealer Services.

If you currently work for a company and receive a check every week or so, then chances are your company does business with ADP. ADP handles everything from staffing services to tax planning. ADP trades at a forward P/E of 16.6 and pays a 2.8% dividend.

Exxon Mobil Corporation (NYSE:XOM) engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products.

Of course the largest oil producer is going to be on this list. Even with the price of oil falling back, Exxon will continue to profit nicely. The company has a strong history of rewarding shareholders. Exxon looks like a nice buy on the recent dip. The stock trades at a forward P/E of 8 and pays a 2.5% dividend.

Microsoft Corporation (NASDAQ:MSFT) develops, licenses, and supports a range of software products and services for various computing devices worldwide.

Microsoft has had a tough time moving out of this range. The company is currently trying to innovate in order to compete with companies such as Apple (NASDAQ:AAPL). Windows is about to launch its new O/S soon and plans to come out with a tablet as well. However, it has been a very difficult couple of years for Microsoft. Even with all this going on, I like the valuation. The stock currently yields a forward P/E of 8.62. They also just announced a 25% increase in the dividend, meaning the yield will be around 3%.

Johnson & Johnson (NYSE:JNJ) engages in the research and development, manufacture, and sale of various products in the health care field worldwide. The company operates in three segments: Consumer, Pharmaceutical, and Medical Devices and Diagnostics.

JNJ has some of the strongest and oldest brands in the world. These include Tylenol, Sudafed, and Band-Aid. The company is a cash cow with medical products consumers will continue to use in a slow economy. The stock trades at a forward P/E of 12 and pays a nice 3.5% dividend.

All of these companies have strong balance sheets and cash flows making them great investments. There are companies out there with stronger balance sheets such as Apple, which has $76 billion in cash and no debt. However, since the company has no debt, it can't get a rating. With the world economy the way it is, I recommend you consider these safe haven investments.

Disclosure: I am long MSFT.