Five Large-Cap Stocks Poised to Rally
BOSTON (
) -- A shift to steady large-cap stocks has helped the group outperform in the past three months. Here are five stocks to consider.
5. Oracle
(ORCL) - Get Report
sells systems software.
The numbers
: Fiscal second-quarter profit increased 13% to $1.5 billion, or 29 cents a share. Revenue grew 4% to $5.9 billion. Oracle's operating margin widened from 36% to 39%. Oracle has a liquid balance sheet, with $21 billion of cash and $15 billion of debt.
The stock
: Oracle returned 40% during the past year, beating the
Dow Jones Industrial Average
and
S&P 500 Index
. The stock trades at a price-to-earnings ratio of 20, a discount to software peers. The shares offer a 0.9% dividend yield.
4. Colgate-Palmolive
(CL) - Get Report
sells toothpaste and soap.
The numbers
: Fourth-quarter profit increased 27% to $631 million, or $1.21 a share, as revenue grew 11% to $4.1 billion. Colgate-Palmolive's operating margin extended from 23% to 25%. We give the company a financial strength score of 9.9 out of 10.
The stock
: Colgate-Palmolive advanced 25% during the past year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 18, a premium to household products peers. The shares offer a 2.2% dividend yield.
3. Medco Health Solutions
(MHS)
is a pharmacy benefit manager.
The numbers
: Third-quarter net income increased 13% to $336 million and earnings per share climbed 19% to 69 cents, boosted by a lower share count. Revenue grew 18% to $15 billion. Medco's operating margin was unchanged at 4%. A quick ratio of 1 and debt-to-equity ratio of 0.7 indicate a stable financial position.
The stock
: Medco advanced 38% during the past year, outpacing the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 26, a premium to health care service peers. Medco doesn't pay dividends.
2. McDonald's
(MCD) - Get Report
sells hamburgers and soft drinks through its franchises.
The numbers
: Fourth-quarter profit increased 23% to $1.2 billion, or $1.11 a share. Revenue grew 7% to $6 billion. The company's operating margin stretched from 26% to 28%. We give McDonald's a financial strength score of 9.9 out of 10.
The stock
: McDonald's climbed 10% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 16, a discount to restaurant peers. The shares offer a 3.4% dividend yield.
1. General Mills
(GIS) - Get Report
sells cereal and other food products.
The numbers
: Fiscal second-quarter profit increased 50% to $566 million, or $1.66 a share, as revenue inched up 2% to $4.1 billion. The company's operating margin widened from 12% to 22%. A quick ratio of 0.6 reflects poor liquidity. A 1.1 debt-to-equity ratio indicates sizable leverage.
The stock
: General Mills climbed 20% during the past year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to food products peers. The shares offer a 2.8% dividend yield.