TSC Ratings provides exclusive stock, ETF and mutual fund recommendations using proprietary tools. Our "safety first" approach aims to reduce risk while achieving performance on a total return basis.
The following so-called value companies have annual revenue above $500 million, below-average valuations, debt that is less than 49% of total capital, and receive "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate.
New Jersey Resources (NJR) is an energy-services company that 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 past 6% and net margin jumping to 4%.The stock: New Jersey Resources has fallen 4% in 2009, underperforming the Dow Jones Industrial Average and the S&P 500. The stock trades at a fair price-to-earnings ratio of 14 and offers an attractive 3.3% dividend yield. Church & Dwight (CHD) makes and markets household, personal-care and specialty products around the world. The numbers: First-quarter revenue rose 5% to $581 million as net income increased 11% to $62 million and earnings per share climbed 9% to 88 cents, hurt by a higher share count. Operating margin improved from 17% to 20% and net margin increased from 10% to 11%. Church & Dwight has an adequate liquidity position, as reflected by a quick ratio of 1.1. And a debt-to-equity ratio of 0.6 demonstrates conservative leverage. The stock: Church & Dwight is flat in 2009, underperforming the Dow and S&P 500. The stock trades at an expensive price-to-earnings ratio of 20 and offers a dividend yield under 1%.
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