Top 5 Value Stocks: N.J. Resources, UGI

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The following companies, considered value stocks, have annual revenue of more than $500 million, less-than-average valuations, debt that is under 49% of total capital and receive "buy" ratings from TheStreet.com Ratings' proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate.

New Jersey Resources(NJR Quote) provides retail and wholesale energy services to customers in New Jersey and other states from the Gulf Coast to New England and Canada.

The numbers: Fiscal second-quarter revenue declined 20% to $938 million as net income and earnings per share surged 183% to $36 million and 83 cents, respectively. The debt-to-equity ratio remained low at 0.6, but a quick ratio of 0.4 indicates a weak cash position. Margins improved significantly during the quarter, with operating margin climbing to 6.2% and net margin jumping to 3.8%.

The stock: New Jersey Resources has fallen 7% in 2009, in line with the Dow Jones Industrial Average. The stock trades at a price-to-earnings ratio of 13 and offers an attractive 3.4% dividend yield.

UGI Corp.(UGI Quote) engages in the distribution and marketing of energy products and services in the U.S. and internationally. The company also operates a heating, ventilation, air conditioning and refrigeration business serving customers in the Mid-Atlantic region.

The numbers: Fiscal second-quarter revenue dropped 9.5% to $2.1 billion as net income increased 25% to $158 million and earnings per share improved 24% to $1.45, continuing a trend of positive growth for eight consecutive quarters. A quick ratio of 0.9 indicates a less-than-ideal liquidity position and a debt-to-equity ratio of 1.5 reflects sizable leverage. Operating margin improved to 17% and net margin jumped to 7.4%.

The stock: UGI has climbed 3% in 2009, outperforming the Dow and the S&P 500. Still, the stock trades at a price-to-earnings ratio under 10, indicating a significant discount to the market, and offers a 3.2% dividend yield.