Top Five All-Around Value Stocks
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% from a year ago to $507 million, or $1.97 a share. Public Service Enterprise Group generates 68% of its operating income from its power segment, which grew 63% year over year in the third quarter. 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. Looking forward, PSEG has already locked in sales of the majority of its expected power input for the remainder of fiscal 2007 at higher prices. This, combined with high utilization of low-cost nuclear power plants and divestiture of the loss-making Lawrenceburg power plant, could help fuel growth. The rating is not risk-free. Public Service Enterprise Group is exposed to risks arising from the reliability of power plants and transmission and distribution equipment, along with related safety hazards. In addition, the company could be negatively affected by regulatory changes.
Total ( 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 revenue growth, 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 63% to $4.89 billion compared with the same period last year, while revenue rose 26% 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 weak operating cash flow.
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. Fourth-quarter net income climbed 28% from a year ago to $2.16 billion, or 81 cents a share. Revenue increased 15% to $28.29 billion, primarily bolstered by strong sales across all of the company's business segments.