BOSTON (TheStreet) -- The following companies have annual revenue of more than $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 earnings surged 183% to $36 million, or 83 cents per share. The debt-to-equity ratio is 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 is flat in 2009, underperforming the Dow Jones Industrial Average and S&P 500. The stock trades at a fair price-to-earnings ratio of 14 and offers an attractive 3.2% dividend yield.Advanced Auto Parts (AAP) sells aftermarket automotive parts, accessories and maintenance items. The numbers: First-quarter revenue increased 10% to $1.7 billion as earnings rose 14% to $94 million, or 98 cents. The operating margin remained stable at 9% and the net margin improved from 5% to 6%. Just $51 million of cash reserves and a quick ratio of 0.1 indicate a weak liquidity position. But a debt-to-equity ratio of 0.3 demonstrates modest leverage. The stock: Advanced Auto Parts has climbed 37% in 2009, beating major U.S. indices. The stock trades at an expensive price-to-earnings ratio of 18 and offers a dividend yield below 1%.
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