"I like to go for cinches. I like to shoot fish in a barrel. But I like to do it after the water has run out."
-- Warren Buffett

History seems to show that good investing doesn't necessarily mean picking out complex situations and basing your investment thesis on Nobel-level math. In fact, as the recent financial crisis has shown us, too much complexity can often end in calamity.

In an effort to track down companies that may fall into that "fish in a barrel" category, I've turned to The Motley Fool's CAPS community. To put together a candidate list, I looked for companies with a conservative balance sheet, a dividend, annualized earnings growth of 5% or better over the past five years, a return on equity above 12%, and a high rating from the CAPS community.


CAPS Rating
 (out of 5)

Debt-to-Equity Ratio

Dividend Yield

5-Year Annualized Earnings Growth

Return on Equity







Schlumberger (NYSE: SLB)






Nike (NYSE: NKE)






Source: CAPS and Capital IQ, a Standard & Poor's company.

While the three companies above aren't meant to be formal recommendations, they are a good starting point for research. Let's take a closer look why these potential investments might make a whole lot of sense.

Rather than getting investors really fired up about the rail industry, Berkshire Hathaway's (NYSE: BRK-B) acquisition of Burlington Northern had investors looking cockeyed at Warren Buffett, wondering why he paid such a handsome price for his prize.

Buffett's rationale certainly has implications for potential investors in any railroad stock, whether that be CSX, Union Pacific, or Canadian National. Buffett's thesis, in short, was that this business is easy to understand, has a definite competitive moat (how many new cross-country railroads do you think will be built?), and will benefit from the long-term growth of the U.S. economy. He kept it pretty darn simple.

For that simplicity, though, he acknowledged that Berkshire's returns aren't going to be spectacular.

Of course, for many investors, reliability and stability trump the potential for massive returns. For those investors, CSX and its 21,000-route-mile rail network may be an investment that makes a whole lot of sense.

If the words "high tech" don't quickly come to mind when you think of the oil and gas industry, then it's high time you met Schlumberger. The company is a leader in providing technology solutions to the oil and gas industry, offering everything from seismic imaging and software products to testing and measurement during exploration and drilling.

The case studies that the company offers on its website give an even better illustration of how its tech savvy helps its customers. In one recent case, Schlumberger used multiple software products to help PetroChina’s (NYSE: PTR) geophysicists find an optimal location to drill an exploration well, which resulted in a significant natural gas discovery.

In another case study, Schlumberger helped Royal Dutch Shell (NYSE: RDS-A) overhaul its companywide collaboration platform. Schlumberger made it easier for experts within Shell to communicate and roll out new technologies.

The 41% drop in 2009 earnings per share certainly doesn't look good for Schlumberger, and those lowered earnings make the company's stock look pretty pricey. But for investors confident in the continued rebound of the oil and gas market, the future could be pretty bright for Schlumberger. Wall Street analysts peg the company's 2011 earnings per share at $3.80, about 46% above 2009's level.

Maybe I'm a little biased because most of my running gear has a Nike swoosh on it and my favorite leisure shoes are Chuck Taylors, another Nike brand. But biased or not, it'd be hard to argue that Nike isn't the dominant global athletic brand. And "brand" is really the key word, since at this point the company could probably slap a swoosh on trash bags and sell them at a premium price.

The CAPS community gives Nike's stock four stars, just one notch below perfection. Much of the pessimism comes from concerns over competition from the likes of Adidas and younger upstarts like Under Armour (NYSE: UA), which is moving into the footwear category.

On the bullish side, Nike fans see the company continuing its long tradition of outstanding performance. CAPS All-Star Mactalon has scored 66 points from an outperform call back in mid-2007; the pitch holds true today:

Nike is a good, solid company that isn't going backwards easily. They are in a growing industry, in which they have a substantial market share and in addition, a seemingly solid balance sheet to go with it. Outperform in the long marathon (in Nike shoes.)

Getting down to business
Now the CAPS community wants you. That's right, do you think these stocks make sense? Or is the community off base in its faith in these companies? Head over to CAPS and join the 160,000-plus members already sharing their thoughts on thousands of stocks.

All of these stocks pay a dividend, but are any of them the best dividend stock? Check out what my fellow Fool Jordan DiPietro has to say.

Berkshire Hathaway is a Motley Fool Inside Value recommendation. Under Armour is a Rule Breakers choice. Berkshire Hathaway and Canadian National Railway are Stock Advisor recommendations. Under Armour is a Motley Fool Hidden Gems recommendation. The Fool owns shares of Berkshire Hathaway and Under Armour. 

Fool contributor Matt Koppenheffer owns shares of Berkshire Hathaway, but does not own shares of any of the other companies mentioned. You can check out the stocks that he is keeping an eye on by visiting his CAPS page or you can connect with him on Twitter as @KoppTheFool. The Fool’s disclosure policy is chillaxin' because it's too busy to chill and relax separately.