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Each business day, Ratings compiles a list of the top five stocks in one of five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- based on data from the close of the previous trading session. Today, large-cap stocks are in the spotlight.

These are stocks of companies with market capitalizations of over $10 billion that rank near the top of all stocks rated by our proprietary quantitative model, which looks at more than 62 factors. In addition, the stocks must be followed by at least one financial analyst who posts estimates on the Institutional Brokers' Estimate System. The stocks are ordered by their potential to appreciate.

Note that no provision is made for off-balance-sheet assets such as unrealized appreciation/depreciation of investments, market value of real estate or contingent liabilities that might affect book value. This could be material for some companies with large underfunded pension plans.

General Mills,

(GIS) - Get Free Report

is the world's sixth-largest food company, producing packaged consumer foods that are marketed in more than 100 countries. We have rated General Mills a buy since November 2004.

For the first quarter of fiscal 2009, the company reported that it achieved strong results, primarily due to strong consumer demand in worldwide markets. First quarter revenue rose 13.8% year over year, but this revenue does not appear to have trickled down to the company's bottom line, as General Mills displayed a decline in earnings per share for the quarter. However, we feel that the company is poised for EPS growth in the coming year, despite reporting somewhat volatile earnings recently. Net sales grew 14% from $3.07 billion in the first quarter of fiscal 2008 to $3.5 billion in the most recent quarter. Net operating cash flow also increased significantly, rising 1,007.35% when compared with the same quarter last year. In addition, we consider the company's 37.3% gross profit margin to be strong.

Management was pleased with what it considered to be a great start to fiscal 2009, as sales and profit results for the first quarter exceeded management's expectations. General Mills increased its earnings guidance for fiscal 2009 to a range of $3.81 to $3.85 per share, up from its previously released forecast of $3.78 to $3.83 per share. The company also expects fiscal 2009 net sales to grow at a mid-single-digit rate. Although the company's growth in net income has been sub par, we feel that its strengths outweigh any weaknesses it may display. Even the best stocks can fall in an overall down market, but in any other environment, we believe that this stock still has good upside potential despite the fact that it has already risen in the past year.

Rohm & Haas

( ROH) is a global producer of specialty materials chemicals. It has been rated a buy since November 2003, supported by the company's revenue growth, solid stock price performance, EPS growth and increase in net income.

For the third quarter of fiscal 2008, the company reported that its earnings inched up 1.6% year over year, led by strong sales growth across business segments. EPS improved 8.2% when compared with the prior year's quarter, despite somewhat volatile earnings growth recently. Timely pricing actions, favorable currency translations, acquisitions and growth in rapidly developing economies helped drive third-quarter revenue higher by 12.1%. Recognition of the company's strengths by investors led to a 27.55% stock price increase over the same quarter last year. In addition, Rohm & Haas announced during the third quarter that it will be acquired by

Dow Chemical

(DOW) - Get Free Report

for an aggregate price of $18.80 billion. Dow Chemical expects the acquisition to be completed by early 2009.

Management felt that its financial performance for the third quarter was reasonable given the continuing deterioration of the economic and operating environment during the quarter. The company maintains confidence in the future performance of the company.


(BUD) - Get Free Report

produces and distributes beer in the U.S. and internationally. We have rated Anheuser-Busch a buy since July 2006 based on a variety of positive investment measures, including the company's solid stock price performance, expanding profit margins, and growth in EPS, revenue and net income.

For the second quarter of fiscal 2008, the company reported that its revenue increased slightly by 4.6% year over year. While this growth was lower than the industry average, it appears to have trickled down to the bottom line, helping to boost EPS by 8.0% compared to the same quarter a year ago. Net income also increased, rising 1.8% when compared to the same quarter a year ago. In addition, the company stated that it had solid sales growth of 4.6 percent compared to the second quarter of fiscal 2007, with U.S. beer shipments and wholesaler sales-to-retailers increasing in the quarter over last year. This increase was led by the launch of the new Bud Light Lime product, along with improved performance from other core brands.

In July, management's outlook for the remainder of its summer selling season was optimistic. Price increases on the majority of the company's U.S. beer volume were planned for September and October at that time, covering approximately 85% of the company's domestic volume. Due to these pricing measures, the company announced that it expects to achieve 4.0% growth in revenue per barrel for full-year fiscal 2008. Cost reduction and operating efficiency measures are also expected to contribute to future profit growth. The company shows generally poor debt management on most measures that we evaluated, but we feel that its strengths outweigh any weakness at this time.


(MCD) - Get Free Report

primarily operates and franchises McDonald's restaurants. We have rated McDonald's a buy since March 2004, based on strengths such as its expanding profit margins and growth in net income, revenue, and EPS.

On Oct. 22, the company reported that global comparable sales growth of 7.1% year over year fueled strong results in the third quarter of fiscal 2008. Revenue increased 6.2% when compared with the prior year's quarter. Although this trailed the industry average of 23.2%, it appears to have led to EPS growth. EPS improved 26.5%, rising from 83 cents in the third quarter of fiscal 2007 to $1.05 in the most recent quarter. Although McDonald's reported earnings have been somewhat volatile recently, we feel that it is poised for EPS growth in the coming year. Net income increased by 11.2% when compared with the same quarter a year ago. In addition, we consider the company's 37.70% gross profit margin to be strong, especially as it has managed to decrease from the same period last year and compares favorably to the industry average of 19.00%.

Management was pleased with its reported higher margin dollars, comparable sales and a double-digit operating income increase. The company plans to continue its focus on disciplined financial practices in order to continue driving strong financial performance in the future. Although no company is perfect, we do not currently see any significant weaknesses that are likely to detract from McDonald's generally positive outlook.

Baxter International

(BAX) - Get Free Report

is a medical products and services company, providing medical devices, pharmaceuticals and biotechnology for the treatment of a variety of diseases including hemophilia, cancer and kidney disease. Baxter has been rated a buy since May 2005, based on such positive investment measures as EPS growth, revenue growth, good cash flow from operations and expanding profit margins.

The company reported on Oct. 16 that its results in the third quarter of fiscal 2008 compared well to its previously posted guidance. Although the results were less than the industry average of 18.2%, revenue growth of 14.6% year over year appears to have helped fuel EPS growth. EPS improved 21.3% in the most recent quarter when compared to the third quarter of fiscal 2007, rising from 61 cents to 74 cents. In fact, the company has demonstrated a pattern of positive EPS growth over the past two years, and we feel that this trend should continue. Net income also increased, rising from $395.00 million a year ago to $472.00 million. Baxter's global sales increased 15.0% year over year to $3.2 billion due to strong performance from the company's international business. The return on equity also improved slightly when compared to the same quarter last year, which can be construed as a modest strength for Baxter.

Based on its strong sales and earnings in the third quarter, Baxter provided fourth-quarter guidance for the first time and raised its full-year 2008 earnings outlook. While the company reaffirmed its expectation for sales growth in the range of 5% to 6% for the full year, it announced that it now anticipates full year earnings per diluted share of $3.35 to $3.37. Fourth-quarter guidance was given as sales growth of approximately 7% and earnings per diluted share of 88 cents to 90 cents. Although the company may harbor some minor weaknesses, we do not believe that any of these are likely to have a significant impact on the company's future results.

Our quantitative rating is based on a variety of historical fundamental and pricing data and represents our opinion of a stock's risk-adjusted performance relative to other stocks. However, the rating does not incorporate all of the factors that can alter a stock's performance. For example, it doesn't always factor in recent corporate or industry events that could affect the stock price, nor does it include recent technology developments and competitive dynamics that may affect the company. For those reasons, we believe a rating alone cannot tell the whole story and should be part of an investor's overall research.

This article was written by a staff member of Ratings.