Top 5 All-Around-Value Stocks for Dec. 31

Chevron (CVX Quote) is one of the world's largest integrated energy companies. The company is engaged in every aspect of the oil and natural gas industry, with major operations in many important gas and oil producing regions worldwide. Household products, packaging, and fuel additives are made from the chemicals that Chevron produces. Chevron also works in manufacturing, marketing, and transportation, along with other interests that include coal mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies. Chevron is headquartered in California, and conducts operations in more than 100 countries.

We have rated Chevron a buy since October 2003. This rating is based in part on the company's strong growth in revenue and earnings, as well as its largely solid financial position and good cash flow from operations. For the third quarter of fiscal 2008, the company reported revenue growth of 42.3% year-over-year. This growth appears to have helped boost earnings per share (EPS), which rose significantly from $1.75 in the third quarter of fiscal 2007 to $3.85 in the most recent quarter. Chevron has demonstrated a pattern of positive EPS growth over the past two years, and we feel that this trend should continue. Net income improved by 112.3%, significantly exceeding that of both the S&P 500 and the Oil, Gas, & Consumable Fuels industry. Earnings from Chevron's upstream operations were aided by higher crude oil prices when compared to last year, although the increase was tempered by the effect of hurricanes in the Gulf of Mexico. Earnings from downstream operations were boosted primarily by improved margins on the sale of refined products. Net operating cash flow also increased, rising 59.73% when compare to the same quarter last year.

In addition, a very low debt-to-equity ratio of 59.73% implies that Chevron has successfully managed its debt levels.

Given the current economic climate, Chevron announced that disciplined capital spending and tight control over costs would be extremely important to its financial success in the future. Although the company currently shows low profit margins and a weak quick ratio of 0.91 could cause future short-term cash flow problems, we feel that the strengths detailed above outweigh any potential weakness at this time.