Top Five Large-Cap Stocks: March 26

Updated from 7:03 a.m. EDT

Each business day, TheStreet.com Ratings compiles a list of the top five stocks in five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- and publishes these lists in the Ratings section of our Web site.

This list is based on data from the close of the previous trading session. Today, large-cap stocks are in the spotlight. These are stocks of companies with market capitalizations of over $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 62 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. The stocks are ordered by their potential to appreciate.

Note that no provision is made for off-balance-sheet assets such as unrealized appreciation/depreciation of investments, market value of real estate or contingent liabilities that might affect book value. This could be material for some companies with large underfunded pension plans.

Large-Cap Stocks to Love Right Now

Apache APA is an independent energy company that explores for, develops and produces natural gas, crude oil and natural gas liquids. The company has interests in Argentina, Australia, Canada, China, Egypt, the U.K. and the U.S.

Apache has been rated a buy since January 2003. Fueled by record energy prices and an 8.0% jump in production, the company's earnings for the fourth quarter more than doubled year over year. Net income rose to $1.07 billion, or $3.19 a share, vs. $520.8 million, or $1.56 share, a year ago. Apache's total revenue surged 53% to $3.01 billion from $1.97 billion, driven by record production and strong commodity prices.

Looking forward to 2008, the company anticipates an earnings contribution from rising natural gas prices in Australia on growing demand in the domestic mining industry and in the liquefied natural gas export market. Apache's future performance depends, however, on its ability to achieve positive results from previous acquisitions. The company also faces challenges from increasing debt levels and comparatively low shareholder returns.

Devon DVN is an independent energy company that explores for oil and gas. The company also processes natural gas and develops, produces and transports oil, gas and natural gas liquids (NGLs). Additionally, the company has midstream operations constructing and operating pipelines, storage and treating facilities and gas processing plants. Devon's oil and gas properties are primarily in the U.S. and Canada, but the company also owns some properties in Azerbaijan, Brazil, China and Russia.

Our buy rating for Devon has not changed since September 2004. Our rating is based on strong growth in revenue and net income, which are further supported by higher realized oil and natural gas liquids prices, rising production volumes, key divestitures and sound cash levels. Total revenue for the fourth quarter of 2007 surged 32% year over year to $3.2 billion, as the oil and natural gas liquids segments saw strong performance. Net income more than doubled to $1.32 billion, or $2.45 per share, vs. $582 million, or $1.11 per share, in the fourth quarter of 2006. The company's oil and natural gas liquids production grew 12% and 19%, respectively. This aided the company's fourth-quarter performance, as did increases in the price for natural gas liquids and the realized oil price.