Ratings Changes: Cooper Industries, Willis

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TheStreet.com Ratings downgraded Cooper Industries(CBE Quote) to "hold." The company makes electrical products and tools internationally.

The numbers: Fiscal first-quarter revenue fell 19% to $1.3 billion as net income dropped 35% to $100 million and earnings per share declined 44% to 48 cents. Operating margin shed 522 basis points to 9.2% and net margin declined 196 basis points to 8%. The company's liquidity has improved since last year's first quarter as the cash balance grew 56% to $319 million. A quick ratio of 0.92 is less than ideal, but a debt-to-equity ratio of 0.5 is a sign of strength. A significant portion of Cooper's revenue is derived from new construction, which is experiencing further pain. But fundamentals are strong and the stock is cheap.

The stock: Cooper Industries is down 1% in 2009, outperforming the Dow Jones Industrial Average and the S&P 500. The stock trades at a low price-to-earnings ratio of 9 and offers a 3.4% dividend yield.

TheStreet.com Ratings upgraded Empire District Electric(EDE Quote) to "buy." The company generates and sells electricity in Missouri, Kansas, Oklahoma and Arkansas.

The numbers: Fiscal first-quarter revenue was flat at $136 million as net income ascended 56% to $11 million and earnings per share climbed 52% to 32 cents. Operating margin jumped 487 basis points to 18% and net margin increased 292 basis points to 8%. The cash balance has improved 76% to $8 million since the year-earlier quarter, but the company's quick ratio is still low at 0.4. A debt-to-equity ratio of 1.4 is also a sign of weakness. Utilities such as Empire District are looking more attractive because of their cheap valuations and strong yields.

The stock: Empire District is down 4% in 2009, underperforming the S&P 500 and outperforming the Dow. The stock trades at a price-to-earnings ratio of about 13 and offers a huge 7.6% dividend yield.