Top 5 Large-Cap Stocks: Oracle, McDonald's

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The following large-cap companies have market values of more than $10 billion and receive "buy" recommendations from TheStreet.com Ratings' proprietary quantitative model, which considers more than 60 factors. The stocks are ordered by their potential to appreciate.

McDonald's(MCD Quote), of course, franchises and operates McDonald's restaurants worldwide, offering hamburgers, coffee and other beverages.

The numbers: First-quarter revenue declined 10% to $5.07 billion but net income increased marginally to $980 million and earnings per share jumped 7% to 87 cents as the net margin remained strong at 20%. A 32% decline in the cash balance to $1.98 billion is a weakness. But a quick ratio of 1.3 and a debt-to-equity ratio of 0.82 indicate a conservative financial position.

The stock: McDonald's has declined 8% in 2009, underperforming the Dow Jones Industrial Average and the S&P 500 Index. But over a one-year period, McDonald's is flat while the Dow has dropped 27% and the S&P 500 has fallen 29%. The stock trades at a price-to-earnings ratio of 15 and offers a dividend yield of 3.5%.

Oracle(ORCL Quote) develops and sells database, or so-called middleware and application software worldwide.

The numbers: Fiscal fourth-quarter revenue declined 5.2% to $6.9 billion as net income fell 7.2% to $1.9 billion. But earnings per share decreased just 2.5% on a lower share count. The operating margin improved 63 basis points to 43% as the net margin shed 57 basis points to 28%. The company holds nearly $13 billion of cash reserves, amounting to a quick ratio of 1.9. And its debt-to-equity ratio is conservative at 0.41.

The stock: Oracle has increased 14% in 2009, outperforming all major U.S. indexes. The stock trades at a price-to-earnings ratio of 18 and doesn't consistently pay dividends.