Top 5 Mid-Cap Stocks for May 14

Each business day, TheStreet.com Ratings 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 -- 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.

Rollins(ROL Quote) provides pest and termite control services and protection against termite damage, rodents, and insects through its subsidiaries. It also offers sanitation services to the food and commodity industries. We have rated the company a buy since November 2003 on the basis solvency, efficiency, and growth in net income, revenue and earnings per share.

For the first quarter of fiscal 2009, Rollins' revenue rose by 15.7% year over year, beating its industry's average growth of 1.5%. As a result, EPS improved 14.3%, continuing a trend of positive EPS growth over the past two years. Net income increased 14.2% compared with the same quarter a year ago, rising from $13.84 to $15.81 million. The company's return on equity improved slightly when compared to the prior year's quarter and can therefore be construed a modest strength. Additionally, we consider Rollins' gross profit margin of 48.40% to be strong, while its net profit margin of 6.5% is above the industry average.