Oracle, McDonald's, Baxter: Top 5 Stocks

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) -- The following companies have market values of more than $10 billion and receive "buy" ratings from our proprietary 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.

Oracle(ORCL Quote) sells computer software worldwide.

The numbers: Fiscal fourth-quarter net income fell 7% to $1.9 billion and earnings per share decreased 3% to 38 cents, cushioned by a lower share count. Revenue declined 5% to $6.9 billion. Its gross margin rose from 82% to 84% and its operating margin remained steady at 43%. The company holds $13 billion of cash reserves, amounting to a quick ratio of 1.9. A debt-to-equity ratio of 0.4 indicates conservative leverage.

The stock: Oracle has increased 24% in 2009, outpacing the Dow Jones Industrial Average and S&P 500. The stock trades at a price-to-earnings ratio of 20, indicating parity with the market, but a discount to software peers. The shares offer a dividend yield of less than 1%.

McDonald's(MCD Quote) sells hamburgers, soft drinks and other food products.

The numbers: Second-quarter net income fell 8% to $1.1 billion and earnings per share dropped 6% to 98 cents, cushioned by a lower share count. Revenue declined 7% to $5.6 billion. Its gross margin climbed from 42% to 44% and its operating margin widened from 27% to 29%. A quick ratio of 1.1 and debt-to-equity ratio of 0.8 demonstrate fiscal stability. We give McDonald's a financial strength score of 8.5 out of 10, higher than the "buy"-list average of 7.