Lance, Balchem: Top 5 Mid-Cap Stocks

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BOSTON (TheStreet) -- The following mid-cap companies have market values between $500 million and $10 billion and receive "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They're ordered by their potential to appreciate, starting with the company with the best growth prospects.

Lance(LNCE Quote) makes snack foods, including Cape Cod Potato Chips and Archway Cookies.

The numbers: Second-quarter net income surged 252% to $9.5 million as earnings per share grew 233% to 30 cents, restrained by a higher share count. Revenue grew 11% to $237 million. Its gross margin jumped from 41% to 44% and its operating margin rose from 3% to 7%. A quick ratio of 1.1 indicates adequate liquidity. A debt-to-equity ratio of 0.4 demonstrates restrained leverage.

The stock: Lance has advanced 22% this year, beating the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 29, a premium to the market and packaged food peers. Shares pay a 2.3% dividend yield.

Balchem(BCPC Quote) sells specialty chemicals.

The numbers: Second-quarter net income increased 45% to $6.9 million and earnings per share climbed 44% to 36 cents, restrained by a higher share count. Revenue fell 16% to $53 million. Its gross margin rose from 24% to 37% and its operating margin jumped from 12% to 19%. The company has an ideal financial position, with $27 million of cash, compared to $8.1 million of debt.

The stock: Balchem is up 17% this year, more than the Dow, but less than the S&P 500. The stock trades at a price-to-earnings ratio of 25, a premium to the market and specialty chemical peers. Shares pay a 0.4% dividend yield.