Today begins with Magellan Midstream Partners ( MMP), which engages in the transportation, storage and distribution of refined petroleum products in the U.S. It has been rated a buy since May 2005. The company has seen record transportation volumes thanks to increasing demand for natural gas and petroleum products in the U.S. and a highly favorable industry outlook going forward. It offers an attractive dividend yield at current price levels and is poised for strong revenue growth in the coming quarter. Risks still remain. There has been a substantial rise in oil prices over the past two years, which could cause a decline in demand for finished products. Reduced demand would lead to a drop in transportation volume and possibly to the freezing of rates. Also, Magellan has raised a huge amount of debt and plans to further increase its leverage to fund aggressive expansion plans.
Rated a buy since November 2005, Belden CDT ( BDC) makes signal transmission products for data networking, consumer electronics, industrial, security and aerospace applications worldwide. It displays net income growth, a low debt-to-equity ratio, a pattern of EPS growth over the past two years and impressive stock price appreciation. These strengths outweigh the company's low profit margins.
Natural gas purchasing, transportation and distribution company Oneok Inc. ( OKE) has been rated a buy since February 2006. The company has enjoyed notable stock price appreciation, increased net operating cash flow and attractive valuation levels. These strengths outweigh the company's generally poor debt management on most measures evaluated by TheStreet.com Ratings.
AllianceBernstein Holding ( AB) has been rated a buy since May 2005. The company shows a number of positive financial measures, including a striking record of EPS growth, revenue growth and a very high gross profit margin. These impressive financial strengths justify the relatively high price of the stock, because the company shows no other significant weaknesses.
Rated a buy since May 2005, Sigma-Aldrich ( SIAL) makes various biochemical and organic chemicals worldwide. It demonstrates revenue growth from new sales initiatives and net income growth supported by a marginal decline in the effective tax rate. The company's growth prospects are promising, due to its strong product pipeline and exposure to industries that are poised for robust growth. Sigma-Aldrich also shows superior return on equity that has consistently surpassed the averages of the chemicals industry for the last three years. Any unexpected hindrance or delay in commercializing the company's strong product pipeline, as well as a slowdown in consumption industries that could affect the company's revenue growth, represent the principal risks to the buy rating.