Top Five Mid-Cap Stocks: July 17

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 we focus on mid-caps. These are stocks of companies that have market capitalizations of between $500 million and $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 60 factors.

The stocks must also be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. They 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.

Energen(EGN - Cramer's Take - Stockpickr) is an energy holding company that engages in the acquisition, development, exploration and production of oil, natural gas and natural gas liquids in the U.S.

The company has two subsidiaries, Energen Resources and Alabama Gas. Energen Resources, which explores for and produces oil and gas, generates about 85% of the company's consolidated net income. Alabama Gas is the largest natural gas distributor in Alabama. Energen is based in Birmingham, Ala.

Energen has been rated a buy since January 2006. A number of positive investment measures should help this stock outperform the majority of stocks that we rate. Energen's revenue increased slightly in the first quarter of fiscal 2008, rising 5.9% year over year. This growth appears to have helped boost the company's earnings per share by 12.5% year over year. In addition, net income improved, rising 12.3% from $103.88 million a year ago to $116.69 million in the first quarter. Energen's expanding profit margins are also strengths, as the company reported that its gross profit margin increased to 45.60% compared with 42.87% in first quarter of 2007.