Oracle, McDonald's: Top 5 Large-Cap Stocks
TheStreet.com Ratings provides exclusive stock, ETF and mutual fund recommendations using proprietary tools. Our "safety first" approach aims to reduce risk while achieving total return performance.
BOSTON (
) -- These companies have market caps over $10 billion and receive "buy"-ratings from our proprietary 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.
Oracle
(ORCL) - Get Report
sells computer software worldwide.
The numbers
: Fiscal first-quarter net income rose 4% to $1.1 billion and earnings per share climbed 5% to 22 cents, boosted by a lower share count. Its gross margin rose from 77% to 81% and its operating margin jumped from 30% to 36%. A quick ratio of 2.5 and $21 billion of cash indicate ample liquidity. A debt-to-equity ratio of 0.6 reflects conservative leverage.
The stock
: Oracle has increased 21% in 2009, outpacing the
Dow Jones Industrial Average
and
S&P 500 Index
. The stock trades at a price-to-earnings ratio of 19, indicating parity with the market, but a discount to software peers. Shares offer a dividend yield of 0.9%.
McDonald's
(MCD) - Get Report
sells hamburgers, soft drinks and other food products.
The numbers
: Second-quarter net income fell 8% to $1.1 billion and earnings per share dropped 6% to 98 cents, cushioned by a lower share count. 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 10% in 2009, trailing major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and restaurant peers. Shares pay a 3.6% dividend yield.
TJX Companies
(TJX) - Get Report
sells clothing and household items through its T.J. Maxx, Marshall's and HomeGoods chains.
The numbers
: Fiscal second-quarter net income increased 31% to $262 million and earnings per share climbed 27% to 61 cents, restrained by a higher share count. Its gross margin rose from 27% to 28% and its operating margin ascended from 7% to 9%. A quick ratio of 0.5 indicates weak liquidity, but the cash balance has grown 200% since the year-earlier period. A debt-to-equity ratio of 0.4 demonstrates conservative leverage.
The stock
: TJX has ascended 87% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 17, a discount to the market and apparel retail peers. Shares pay a 1.3% 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 and S&P 500. The stock trades at a price-to-earnings ratio of 24, a premium to the market and health care peers. The company does not 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 9% 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.
TSC Ratings was given an award this year for "Best Stock Selection" among independent research providers by BNY ConvergEx Group. A rating can be viewed for any stock through our
. Ratings are derived from a variety of fundamental and pricing figures and represent our opinion of risk-adjusted performance. However, the rating doesn't incorporate all factors that can alter a stock's performance.
-- Reported by Jake Lynch in Boston.
