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Microsoft Corporation (MSFT), Wal-Mart Stores, Inc (WMT): How to Invest Despite the Trust Deficit

Forbes released its list of The Most Trustworthy Companies this week, ranked using corporate governance experts GMIRatings’ accounting and governance (AGR) score. The organization scoured more than 8,000 companies and revealed its top 100. These companies are noteworthy not only for their use of good, conservative accounting, but also boast good corporate governance policies and management.

To that end, the highest rated companies have the least possibility of negative — and costly — events like lawsuits, SEC investigations, bankruptcy, and good old-fashioned lousy stock returns.

Many of the companies GMIRatings indicated as worthy of high degrees of trust don’t have high degrees of name recognition. Of the large-cap companies listed, Cincinnati Financial (NASDAQ:CINF) received the only perfect 100 AGR score.

Entegris (NASDAQ:ENTG) and Mueller Industries (NYSE:MLI) both received AGR scores of 99 among the mid-cap companies highlighted. Of small-cap companies on the list, Daktronics (NASDAQ:DAKT), First Merchants (NASDAQ:FRME), and Sykes Enterprises (NASDAQ:SYKE) all racked up perfect 100 scores.

Trust, but verify
Such lists give investors who are looking for the least risky companies some grist for the research mill. Last week, I covered the corporate CEOs enjoying the highest employee approval according to Glassdoor data. Here at the Fool, we recently launched our first-ever list of The 25 Best Companies in America.

While there’s a trust deficit these days — with good reason — there’s also a bumper crop of an all-important resource: information. For investors, access to information can most certainly help steer portfolios into more positive directions, and help avoid the most negative impacts.

No list is the be-all and end-all to perfect investment knowledge; as long as we’re talking “trust,” let’s also remember the old saying: “Trust, but verify.” Still, using the informational resources out there in order to search out the best companies and shun the scandal-ridden and untrustworthy ones goes a long way to protecting portfolios — and may even encourage corporate managements to do better.

The article How to Invest Despite the Trust Deficit originally appeared on

Alyce Lomax has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

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