We all want the best in life, whether it's the best clothes, the best cars, the best houses, or the best stocks

One way to find the best stocks is to look for companies that multiple analysts have picked to outperform. It's the analysts' job to rate companies based on their fundamentals, outlook, and valuation, so if several analysts have a buy rating on a particular stock, that might just mean it's a winner.

Take snack and beverage giant PepsiCo (NYSE:PEP) or construction company Fluor (NYSE:FLR), which have outperform calls from 19 and 16 Wall Street analysts , respectively, according to Motley Fool CAPS. Check under the hood of these analyst ratings and you do indeed find strong companies.

PepsiCo remains a solid company despite the brutal recession. Revenue for the maker of Gatorade, Pepsi and Frito Lay declined 3% year over year in the second quarter mostly because of currency translation. In constant currency, sales were up 5.5% for the quarter. The company's international exposure helped support profits, enabling Pepsi to counteract weakness in the U.S. Margins beat expectations across all business units, and the company reaffirmed its full-year outlook.

The recession isn't getting in the way of Pepsi's focus on investing now for a better future. Pepsi has made an offer for its bottlers in an effort to better control costs, only to be rebuffed. Analysts, though, say Pepsi will come back with higher offers. Stay tuned.

Fluor, an engineering and construction management company, is making deals. Just this month the company secured a contract with the U.S. Army to help build operating bases in Afghanistan's northern region that could be worth more than $7 billion over five years. That comes on the heels of a $1.5 billion deal with Canada's Imperial Oil's Kearl oil sands project, which involves surface mining and bitumen extraction. It's weathering the recession surprisingly well for a company that operates in the cyclical infrastructure space.

The company has a solid balance sheet. It holds about $2 billion in cash and short-term securities and sports a measly debt load of about $140 million. Fluor is also very efficient with its owners' capital, boasting a return on equity of 30.3% over the past 12 months. Investors can get a better read on the company when it reports earnings on Aug. 10.

As you can tell, analyst ratings can lead to strong stock ideas. Wouldn't it be great to know which companies Wall Street favors the most? To find some of the Street's favorite companies, I used the screening tool at the "wisdom-of-crowds" club we call CAPS. I screened using the following criteria:

  • Stocks with 10 or more outperform ratings from Wall Street analysts.
  • Stocks with 1,000 or more outperform ratings from members of the CAPS community.
  • Stocks with CAPS ratings of five stars -- the highest possible.
  • Stocks with market caps of $5 billion or greater.             

Here are some of the companies that showed up when I ran the screen. (You can view today's version of my screen here.)


Market Cap (in billions)

Outperform Picks

Wall Street Outperforms

Accenture (NYSE:ACN)








Bristol-Myers Squibb (NYSE:BMY)




Colgate-Palmolive (NYSE:CL)












Procter & Gamble (NYSE:PG)




Source: Motley Fool CAPS.

Keep in mind, though, that while analysts understand equities well, you shouldn't purchase stocks based solely on their buy recommendations. Instead, make their calls an indicator of further research to see whether a particular stock is right for your portfolio.

Start searching for your favorite stocks at Motley Fool CAPS today. Let our 135,000-member community help you make better investing decisions.

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Fool contributor Jennifer Schonberger does not own shares of any of the companies mentioned in this article. Accenture is a Motley Fool Inside Value pick. PepsiCo and Procter & Gamble are Income Investor picks, and the Fool owns shares of Procter & Gamble. The Motley Fool has a disclosure policy.