Top Blue-Chip Stocks Jump 59% in a Year - TheStreet

BOSTON (

TheStreet

) -- Blue-chips led the rally last fall and have outperformed small-caps so far this year. Consider the following five large-company stocks, which are rated "buy" from

TheStreet.com Ratings

.

5. Medco Health Solutions

(MHS)

is a pharmacy-benefits manager.

The numbers

: Third-quarter net income increased 13% to $336 million, and earnings per share jumped 19% to 69 cents. Revenue grew 18% to $15 billion. Medco's operating margin was unchanged at 4%. A quick ratio of 1 reflects adequate liquidity. A debt-to-equity ratio of 0.7 indicates reasonable leverage.

The stock

: Medco has advanced 59% over the past year, outpacing major U.S. indices. The stock trades at a price-to-earnings ratio of 19, a premium to health-care-service peers. Medco doesn't pay dividends.

4. Colgate-Palmolive

(CL) - Get Report

sells personal products, including toothpaste and soap.

The numbers

: Third-quarter net income rose 18% to $591 million and earnings per share climbed 19% to $1.12. Revenue remained flat at $4 billion. Colgate-Palmolive's operating margin stretched from 21% to 24%. A quick ratio of 0.7 indicates less-than-ideal liquidity. A debt-to-equity ratio of 1.1 reflects higher-than-average leverage.

The stock

: Colgate-Palmolive has increased 24% in the past year, more than the

Dow Jones Industrial Average

, but less than the

S&P 500 Index

. The stock trades at a price-to-earnings ratio of 16.5, a premium to household-products peers. The shares offer a 2.2% dividend yield.

3. McDonald's

(MCD) - Get Report

sells hamburgers, soft drinks and other food products at its global franchises.

The numbers

: Third-quarter net income increased 6% to $1.3 billion and earnings per share climbed 10% to $1.15. Revenue declined 4% to $6 billion. The company's operating margin increased from 28% to 31%. A quick ratio of 0.9 reflects less-than-ideal liquidity. A debt-to-equity ratio of 0.8 indicates reasonable leverage.

The stock

: McDonald's has increased 3.6% during the past year, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to restaurant peers. The shares offer a 3.5% dividend yield.

2. Quest Diagnostics

(DGX) - Get Report

provides diagnostic testing, services and information.

The numbers

: Third-quarter net income rose 73.6% to $192.2 million, and earnings per share climbed 82% to $1.02. Revenue increased 3.9% to $1.9 billion. The company's operating margin widened from 17.4% to 18.4%. A quick ratio of 1.4 reflects solid liquidity. A debt-to-equity ratio of 0.7 indicates reasonable leverage.

The stock

: Quest has gained 25% in the past 12 months, lagging behind major U.S. indices. The stock trades at a price-to-earnings ratio of 14, a discount to restaurant peers. The shares offer a 0.7% dividend yield.

1. 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. Revenue inched up 2% to $4.1 billion. The company's operating margin stretched 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 has climbed 18.2% over the past year, underperforming 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.

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Prior to joining TheStreet.com Ratings, David MacDougall was an analyst at Cambridge Associates, an investment consulting firm, where he worked with private equity and venture capital funds. He graduated cum laude from Northeastern University with a bachelor's degree in finance and is a Level III CFA candidate.