McDonald's, TJX: Top 5 Big Stocks
BOSTON (
) -- These companies have market caps over $10 billion and "buy" ratings from our 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.
Fast-food chain
McDonald's
(MCD) - Get Report
sells hamburgers and French fries.
The numbers
: Second-quarter net income fell 8% to $1.1 billion, or 98 cents a share. 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 8% this year, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and restaurant peers. The shares offer a 3.8% dividend yield.
TJX
(TJX) - Get Report
sells clothing and household items through its TJ Maxx, Marshall's and HomeGoods stores.
The numbers
: Fiscal second-quarter net income increased 31% to $262 million, or 61 cents a share. Revenue jumped 4% to $4.7 billion. Its gross margin rose from 27% to 28%, and its operating margin expanded from 7% to 9%. A quick ratio of 0.5 indicates weak liquidity. A debt-to-equity ratio of 0.4 demonstrates conservative leverage.
The stock
: TJX has gained 81% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market and other clothing retailers. The shares offer a 1.3% dividend yield.
Colgate-Palmolive
(CL) - Get Report
sells hygiene products, such as toothpaste and soap.
The numbers
: Second-quarter net income rose 14% to $562 million, or $1.07 a share. Revenue fell 6% to $3.7 billion. Its gross margin rose from 59% to 61%, and its operating margin increased from 21% to 24%. A quick ratio of 0.8 indicates less-than-ideal liquidity. A debt-to-equity ratio of 1.5 reflects higher-than-ideal leverage.
The stock
: Colgate-Palmolive has advanced 10% this year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 19, indicating parity with the market, but a premium to household product makers. The shares offer a 2.3% dividend yield.
Medco Health Solutions
(MHS)
is one of the largest pharmacy benefit managers in the U.S.
The numbers
: Second-quarter net income rose 19% to $312 million and earnings per share jumped 26% to 64 cents, boosted by a lower share count. Revenue increased 17% to $15 billion. Its gross margin was little changed at 7%, and its operating margin remained steady at 4%. Medco has less-than-ideal liquidity, reflected in its quick ratio of 0.9. A debt-to-equity ratio of 0.8 indicates reasonable leverage.
The stock
: Medco has advanced 34% this year, beating the
Dow Jones Industrial Average
and
S&P 500 Index
. The stock trades at a price-to-earnings ratio of 24, a premium to the market and health care peers. The company doesn't pay dividends.
Baxter
(BAX) - Get Report
sells health care equipment.
The numbers
: Second-quarter revenue declined 2% to $3.1 billion, but net income ascended 8% to $587 million and earnings per share climbed 13% to 96 cents, boosted by a lower share count. Its gross margin increased from 56% to 57%, and its operating margin rose from 22% to 24%. A quick ratio of 1.2 indicates ample liquidity, and a debt-to-equity ratio of 0.6 demonstrates conservative leverage.
The stock
: Baxter has climbed 7% this year, less than major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market and health care equipment peers. Shares pay a 1.8% dividend yield.
-- Reported by Jake Lynch in Boston.
