While the credit crisis is hurting nearly all financial companies, some are proving more resilient because they occupy reliable niches, says Donald Peters. Delivering superior services, these steady performers have long-term relations with loyal customers.

Peters looks for companies with high profit margins and little debt, he says. And instead of favoring businesses that are enjoying short-term earnings spurts—as enticing as they are—he would rather see more modestly increasing profits year after year. (Another green light for Peters is a company’s history of raising its dividend nearly every year.)
To avoid overpaying, he seeks stocks with price-earnings ratios that are below their long-term averages. His favorites right now include…

Northern Trust Corporation (NTRS). This firm provides money-management services to corporations and wealthy individuals. Management fees provide steady income. Demand for quality asset management should grow as baby boomers retire. Recent share price: $50.92.

Paychex, Inc. (PAYX). This company processes payrolls for employers. Because of recession fears, the shares now sell at bargain levels. At its recent price, the stock pays a rich dividend of 4%. Recent share price: $27.46.