NEW YORK (

TheStreet

) -- The five small-cap stocks rated highest by

TheStreet Ratings

have all increased earnings over the past year, and three have double-digit upside based on price targets.

The following five companies have market capitalizations of between$50 million and $500 million and are rated at least B+, which is equivalent to a "buy":

5. Atrion Corp.

Company Profile

Atrion Corp.

(ATRI) - Get Report

of Allen, Texas, was founded in 1944 and manufactures medical and fluid delivery devices. The shares closed at $151.50 Tuesday, down 2% year-to-date.

Income Statement

The company reported second-quarter net income of $5.43 million, or $2.67 a share, increasing from $4.70 million, or $2.31 a share, the previous quarter and $4.66 million, or 2.30 a share, a year earlier. Second-quarter revenue was $27.9 million, increasing 7% year-over-year, with CEO Emile Battat saying that sales in the "Marine and Airline markets increased sharply in this year's second quarter."

Balance Sheet

Atrion's quick ratio is 2.41, showing a strong ability to cover short-term cash needs. The company has no long-term debt.

Stock Ratios

Shares trade for 16 times earnings, lower than some of the small-cap companies in the Health Care Equipment and Supplies category, including

ICU Medical

(ICUI) - Get Report

whose shares trade for 21 times earnings and

Merit Medical Systems

(MMSI) - Get Report

, which has a P/E of 22..

Analyst Ratings

According to Thomson Reuters, there are no sell-side analysts covering Atrion Corp.

TheStreet Ratings

rates the shares a B+ (Buy), and has a 12-month price target of $173.06, implying 14% upside.

4. Chesapeake Utilities Corporation

Company Profile

Chesapeake Utilities Corp.

(CPK) - Get Report

Dover, Del. Distributes natural gas in Delaware, Maryland and Florida, distributes electricity in Florida and provides gas transmission services to other utilities in several states. The company was founded in 1859. Shares closed at $34.54 Tuesday, returning 11% year-to-date.

Based on a quarterly payout of 33 cents the shares have a dividend yield of 3.80%.

Income Statement

Second-quarter net income was $3.3 million, or 35 cents a share, compared to $14 million, or $1.47 a share. in the first quarter and $806 thousand, or 12 cents a share, in the second quarter of 2009. Second-quarter operating revenue was $80.1 million, nearly double from a year earlier, reflecting the October 2009 acquisition of Florida Public Utilities.

Balance Sheet

Chesapeake's quick ratio is a low 0.44, however the company's net cash flow for the first half of 2010 was a positive $6.4 million. The ratio of debt to capital was 0.38.

Stock Ratios

Shares trade for 13 times earnings, which is in the middle of the pack when compared to other small-cap utility companies.

Analyst Ratings

According to Thomson Reuters, two analyst have buy ratings on the shares and two recommend investors hold the shares. A median price target of $37 indicated little upside over the short term, but the company's growing revenue and attractive dividend yield on the shares supports the A, or "strong buy" rating by

TheStreet Ratings

.

3. Oil-Dri Corporation of America

Company Profile

Oil-Dri Corp. of America

(ODC) - Get Report

is headquartered in Chicago and was founded in 1941. The company manufactures and distributes sorbent products, including cat litter as well as Oil-Dri brand floor absorbent, and other products related to purification, filtration and absorption to various industries. Shares closed at $21.83 Tuesday, returning 44 year-to-date.

Based on a quarterly dividend payout of 16 cents, the shares have a dividend yield of 2.93%.

Income Statement

Oil-Dri's fiscal year ends on July 31 and the company hasn't yet announced results for the fiscal fourth quarter of 2010. For the quarter ended April 30, net income was $2.6 million, or 35 cents per share, compared to $2.3 million, or 31 cents a share, the previous quarter and $2.4 million or 33 cents a share. Revenue for the fiscal third quarter declined 3% year-over-year to $56.3 million, although a reduction in expenses offset the decline. CEO Daniel Jaffee attributed the revenue decline to "reduced distribution of our Cat's Pride branded cat litters at Walmart."

Balance Sheet

The company's quick ratio is a strong 1.98 and the ratio of debt to capital is 0.16.

Stock Ratios

Oil-Dri trades for 17 times earnings, which is high among players in the Household Products category.

Analyst Ratings

According to Thomson Reuters, there are no sell-side analysts covering Atrion Corp.

TheStreet Ratings

rates Oil-Dri an A+ or strong buy, and has a 12-month price target of $28.59, implying 31% upside.

2. Hawkins, Inc.

Company Profile

Hawkins, Inc.

(HWKN) - Get Report

of Minneapolis, Minn. was founded in 1938. The company manufactures and distributes specialty chemicals and provides related services through its industrial segment and also provides equipment and chemicals through its water treatment segment. Shares closed at $36.51 Tuesday, returning a whopping 71% year-to-date.

Based on a semi-annual payout of 30, the shares have a dividend yield of 1.64%. The next dividend will be paid on October 8, to shareholders of record on Sep. 24, along with a special dividend of 10 cents a share.

Income Statement

Hawkins's fiscal year 2010 ended on March 31. Net income for the first fiscal quarter of 2011 ended June 30 was $7.4 million or 72 cents a share, compared to $5.5 million or 54 cents the previous quarter and $6.1 million or 59 cents a share a year earlier. The company reported $74.7 million in sales, increasing from $73.6 million a year earlier.

CEO John Hawkins said "Commodity prices have stabilized in the last several months, whereas a year ago we were selling higher cost inventory at a time when market prices were rapidly declining."

Balance Sheet

The company has a strong balance sheet with a quick ratio of 3.0 and no long-term debt.

Stock Ratios

Shares trade for 14 times earnings, matching

TPC Group

( TPCG), which is another small-cap company in the Chemicals space.

Analyst Ratings

According to Thomson Reuters, there is one analyst covering the shares, with buy rating and a $23 price target.

TheStreet Ratings

rates Hawkins an A+ , or strong buy, with a target of $44.68, implying 22% upside potential.

1. American Physicians Service Group

Company Profile

The small-cap stock rated highest by

TheStreet Ratings

is

American Physicians Service Group

(AMPH) - Get Report

of Austin, Texas. The company was founded in 1975 and is the holding company for

APS Insurance Services

, which provides liability insurance for doctors and other health care providers, primarily in Texas. Shares closed at $32.35 Tuesday, returning 40% year-to-date.

Income Statement

Second-quarter net income was $6.2 million or 90 cents a share, increasing from $4.5 million or 65 cents a share in the first quarter and $4.9 million or 70 cents a share a year earlier. Net premiums earned declined 4% year-over-year to $16.1 million during the second quarter, but was more than offset by a decline in insurance losses.

The company repurchased 1% of its outstanding shares during the second quarter.

Balance Sheet

Tim LaFrey, the president of American Physicians Service Group said the company's "reserves remain at the upper end of the estimated range of loss exposure." Cash and investments totaled $264 million as of June 30, increasing 2% year-over-year.

Stock Ratios

The shares trade for 9 times earnings which is exceeded among small-cap insurance companies by

FPIC Insurance

( FPIC), which has a P/E of 11.

Analyst Ratings

According to Thomson Reuters, two analysts cover American Physicians Service Group, and both have hold ratings on the shares. The current share price exceeds the median price target among analysts.

TheStreet Ratings

has an A+ , or strong buy, on the shares, with a $32.30 price target.

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--

Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.