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Top 5 Stocks: Dollar Tree, General Mills

TheStreet.com Ratings provides exclusive stock, ETF and mutual fund recommendations using proprietary tools. Our "safety first" approach aims to reduce risk while achieving total return performance.

BOSTON ( TheStreet) -- These companies have annual revenue above $500 million, below-average valuations, debt that's less than 49% of total capital and "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They're ordered by their potential to gain.

MGE Energy (MGEE - Get Report) is a Wisconsin-based electric company.

The numbers: First-quarter revenue dropped 5% to $181 million, but net income increased 8% to $15 million. Earnings per share climbed 3% to 65 cents, hurt by a higher share count. The operating margin passed 13% and the net margin increased from 7% to 8%. Although a quick ratio of 0.4 indicates weak liquidity, MGE has a lower debt load than its peers. A debt-to-equity ratio of 0.8 is a sign of restrained leverage. We give the company a financial strength score of 8.9 out of 10, which is higher than our "buy"-rated average.

The stock: MGE has risen 9% this year, beating the Dow Jones Industrial Average, but underperforming the S&P 500 Index. The stock trades at a fair price-to-earnings ratio of 15 and offers a 4% dividend yield, which is higher than the S&P 500 average.

Advance Auto Parts (AAP - Get Report) sells replacement parts, accessories and maintenance items for cars.

The numbers: First-quarter revenue increased 10% to $1.7 billion. 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.

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SYM TRADE IT LAST %CHG
AAP $144.99 -2.44%
DLTR $80.42 -0.89%
GIS $56.05 -0.59%
MGEE $43.13 -1.64%
VLGEA $33.07 -1.14%

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DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

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