Top 5 Value Stocks: Energy Still Has Gas

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The following companies have annual revenue of more than $500 million, below-average valuations, debt that is less than 49% of total capital and receive "buy" ratings from TheStreet.com Ratings' proprietary quantitative model, which considers more than 60 factors. The companies, categorized as value stocks, are ordered by their potential to appreciate.

New Jersey Resources ( NJR) is an energy-services company that provides retail and wholesale energy services to customers in New Jersey and other states from the Gulf Coast to New England and Canada.

The numbers: Fiscal second-quarter revenue declined 20% to $938 million as net income and earnings per share surged 183% to $36 million and 83 cents, respectively. The debt-to-equity ratio remained low at 0.63, but a quick ratio of 0.43 indicates a weak cash position. Margins improved significantly, with the operating margin climbing 443 basis points to 6.2% and the net margin jumping 272 basis points to 3.8%.

The stock: New Jersey Resources has fallen 6% in 2009, in line with the performance of the Dow Jones Industrial Average. The stock trades at a price-to-earnings ratio of 13 and offers an attractive 3.4% dividend yield.

Village Super Market ( VLGEA) operates a chain of ShopRite supermarkets in the U.S.

The numbers: Fiscal third-quarter revenue increased 7% to $293 million as net income increased 25% to $6.3 million and EPS climbed 24% to 47 cents. Same store sales, a gauge of year-over-year improvement, jumped more than 7%. The company has a modest $36 million debt load and more than $47 million of cash, which works out to a quick ratio of 0.82 and a debt-to-equity ratio of 0.19.

The stock: Village Super Market has increased 3% in 2009 and is up 13% from its March low. The stock trades at a price-to-earnings ratio of 17 and offers a 2.9% dividend yield.

UGI Corp. ( UGI) operates in the distribution and marketing of energy products and services in the U.S. and abroad. The company also operates a heating, ventilation, air conditioning and refrigeration business serving customers in the Mid-Atlantic region.

The numbers: Fiscal second-quarter revenue dropped 9.5% to $2.1 billion as net income increased 25% to $158 million and EPS improved 24% to $1.45, continuing a trend of positive growth for eight consecutive quarters. A quick ratio of 0.86 indicates a less-than-ideal liquidity position and a debt-to-equity ratio of 1.46 reflects sizable leverage. The operating margin climbed 432 basis points to 17%, and the net margin jumped 207 basis points to 7.4%.

The stock: UGI has risen 4% in 2009, outperforming the Dow Jones Industrial Average and the S&P 500 Index. Still, the stock trades at a price-to-earnings ratio under 10, indicating a significant discount to the market, and pays a 3.14% dividend yield.

Enterprise Products Partners ( EPD) is a midstream energy company that provides services to producers and consumers of natural gas, NGLs, crude oil and petrochemicals in the U.S., Canada and Gulf of Mexico.

The numbers: Fiscal first-quarter revenue fell 40% to $3.4 billion as net income weakened 13% to $225 million and EPS fell 20% to 41 cents. A quick ratio of .62 and a debt-to-equity ratio of 1.48 indicate a less-than-ideal financial position. However, margins improved significantly during the quarter, with operating margin climbing 429 basis points to 10.5% and net margin jumping 202 basis points to 6.6%.

The stock: Enterprise Products has climbed 19% in 2009, outperforming all major indexes. Yet, at its current price, the stock still offers a cash distribution yield of 8.5%. Cash distributions are taxed differently than dividends.

Rock-Tenn ( RKT) makes and sells packaging products and merchandising displays worldwide.

The numbers: Fiscal second-quarter revenue fell 1.4% to $676 million as net income and earnings per share more than doubled to $37 million and 97 cents, respectively. The operating margin strengthened 460 basis points to 13%, and the net margin climbed 304 basis points to 5.5%. The company has a weak financial position, as reflected by its high debt-to-equity ratio of 2.26 and low quick ratio of 0.5.

The stock: Rock-Tenn has climbed 10% in 2009, outperforming the Dow Jones Industrial Average and the S&P 500. The stock trades at a price-to-earnings ratio of 13 and pays a lackluster 1% dividend yield.

TSC Ratings was recently given an award for "Best Stock Selection" amongst independent research providers by BNY ConvergEx Group. To see how your portfolio can utilize our research, click here.A rating can be viewed for any stock through our screener stock rating screener. Each rating is derived from a variety of fundamental and pricing figures and represents our opinion of risk-adjusted performance relative to a 5,000+ stock coverage universe. However, the rating does not incorporate all factors that can alter a stock's performance, such as corporate or industry events, technology innovations and shifts in competitive dynamics.

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