Top Large-Cap Stocks With High Ratings

Oracle, General Mills, Colgate-Palmolive, Medco Health Solutions and McDonald's are rated 'buy.'
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BOSTON (TheStreet) -- Large-cap stocks are trading at a historical discount. Here are five investments to consider.

5. Oracle

(ORCL) - Get Report

sells systems software.

The numbers

: Fiscal second-quarter net income increased 13% to $1.5 billion, and earnings per share advanced 16% to 29 cents, helped by a smaller float. 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 30% 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. 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 1.7% 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 18% during the past year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to food products peers. The shares offer a 2.8% dividend yield.

3. 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. The company's operating margin extended from 23% to 25%. The model awards Colgate-Palmolive a financial strength score of 9.9 out of 10.

The stock

: Colgate-Palmolive advanced 24% during the past year, beating the Dow and S&P 500. 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.

2. Medco Health Solutions

(MHS)

is a pharmacy benefit manager. The company is scheduled to report fourth-quarter results on Feb. 23.

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 29% during the past year, outpacing the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 25, a premium to health care services peers. Medco doesn't pay dividends.

1. McDonald's

(MCD) - Get Report

sells hamburgers and soft drinks through its franchises.

The numbers

: Fourth-quarter net income increased 23% to $1.2 billion and earnings per share climbed 28% to $1.11, helped by a smaller float. Revenue grew 7.3% to $6 billion. The company's operating margin stretched from 26% to 28%. The model awards McDonald's a financial strength score of 9.9 out of 10.

The stock

: McDonald's climbed 7% during the past year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to restaurant peers. The shares offer a 3.5% dividend yield.

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