Oracle, McDonald's: Top 5 Large-Cap 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) -- These companies have market caps over $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 first-quarter net income rose 4% to $1.1 billion and earnings per share climbed 5% to 22 cents, boosted by a lower share count. Its gross margin rose from 77% to 81% and its operating margin jumped from 30% to 36%. A quick ratio of 2.5 and $21 billion of cash indicate ample liquidity. A debt-to-equity ratio of 0.6 reflects conservative leverage.

The stock: Oracle has increased 21% in 2009, outpacing the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 19, indicating parity with the market, but a discount to software peers. Shares offer a dividend yield of 0.9%.

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 rose from 27% to 29%. A quick ratio of 1.1 and debt-to-equity ratio of 0.8 demonstrate fiscal stability.

The stock: McDonald's is down 10% in 2009, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and restaurant peers. Shares pay a 3.6% dividend yield.