Pegasystems, Rollins: Top 5 Mid-Cap Stocks

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BOSTON (TheStreet) -- The following mid-cap companies have market values between $500 million and $10 billion and "buy" ratings from our quantitative model, which considers more than 60 factors. They're ordered by their potential to appreciate, starting with the company with the best growth prospects.

Church & Dwight(CHD Quote) sells household products, including Arm & Hammer baking soda and Brillo pads.

The numbers: Second-quarter net income increased 27% to $58 million, or 88 cents a share, as revenue rose 5% to $623 million. Its gross margin increased from 43% to 49% and its operating margin expanded from 14% to 16%. A quick ratio of 1.2 demonstrates ample liquidity and a debt-to-equity ratio of 0.5 indicates conservative leverage.

The stock: Church & Dwight is up 3% this year, underperforming major U.S. indices. The stock trades at a price-to-earnings ratio of 19, equal to the market, but a premium to household products peers. The stock offers a dividend yield of 1%.

Pegasystems(PEGA Quote) sells software that automates business processes.

The numbers: Second-quarter net income surged 294% to $11 million, or 30 cents, as revenue rose 25% to $64 million. Its gross margin expanded from 59% to 66% and its operating margin grew from 5% to 18%. Pegasystems has an outstanding liquidity position, with a quick ratio of 3.9, and has no debt.

The stock: Pegasystems has soared 167% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 50, more than the market and application software peers, and offers a dividend yield less than 1%.