Each business day, TheStreet.com Ratings compiles a list of the top five stocks in five categories -- fast-growth, all-around value, large-cap, mid-cap and small-cap -- and publishes these lists in the
Rated a buy since December 2005, Telmex-Telefonos de Mexico ( TFONY) provides fixed-line telephony services in Mexico, the U.S. and numerous countries in Latin America. It maintains a largely solid financial position with reasonable debt levels by most measures, revenue growth and a pattern of EPS growth over the past two years that is likely to continue.
Public Service Enterprise Group ( PEG) sells electricity and natural gas primarily in the northeastern and mid-Atlantic U.S. It has been rated a buy since November 2006. Third-quarter profit climbed 35.2% from a year ago to $507 million, or $1.97 a share. Public Service Enterprise Group generates 67.6% of its operating income from its power segment, which grew 63.3% in the third quarter when compared with the same period last year. The growth was powered by higher prices realized, an increase in power generation and lower generation cost. The company has also seen an increase in generating capacity from its nuclear power plants.
Total S.A. ( TOT), an integrated oil and gas company, has been rated buy since December 2005. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, EPS growth, increase in net income and attractive valuation level. Total's revenue growth outpaces the industry average, driving higher earnings. Total has demonstrated a pattern of positive EPS growth over the past year, a trend that should continue. Third-quarter net income climbed 62.8% to $4.89 billion compared with the same period last year, while revenue rose 26.1% over the same time frame. Even though it has already enjoyed a nice gain in the past year, Total's stock still shows upside potential. These strengths outweigh the company's low profit margins.
Hewlett-Packard ( HPQ), a technology products and services company, has been rated a buy since December 2005. The rating is based on the company's strong top- and bottom-line growth as well as its expanding margins. These positives are further supported by notable returns, reasonable leverage levels, and growth due to strategic acquisitions.
Railroad operator Union Pacific ( UNP) has been rated a buy since October 2005. The company's diversified business model and growth initiatives leave it well-positioned to gain from positive trends in the railroad industry. Third-quarter profit climbed 27% over a year ago to $532 million, or $2 a share. Union Pacific serves a broad range of customers, putting the company in a strong competitive position and making it less vulnerable to softness in the housing and auto industries. Tightness in trucking capacity due to a driver shortage, increased highway congestion and higher fuel prices have resulted in higher demand for rail transport recently. Also, with double-stacked railcars and computer-guided systems, railroads are becoming more competitive than trucks.