MGE Energy, Dollar Tree: Top 5 Value Stocks

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BOSTON ( TheStreet) -- These companies have annual revenue above $500 million, below-average valuations, debt that is less than 49% of total capital and receive "buy" ratings from our proprietary quantitative model, which considers more than 60 factors. They're ordered by their potential to appreciate, starting with the company with the best growth prospects.

MGE Energy ( MGEE) is a Wisconsin-based electric utility.

The numbers: Second-quarter net income dropped 6% to $10 million and earnings per share fell 10% to 43 cents, hurt by a higher share count. Revenue decreased 14% to $108 million. Its gross margin rose from 23% to 25% and its operating margin climbed from 15% to 16%. A quick ratio of 0.3 demonstrates weak liquidity. But a debt-to-equity ratio of 0.7 is lower than the industry average, indicating restrained leverage.

The stock: MGE has advanced 11% in 2009, 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, a discount to the market and utility peers. Shares pay a 4% dividend yield.

Casey's General Stores ( CASY) operates convenience stores in the Midwest.

The numbers: Fiscal first-quarter revenue fell 24% to $1.2 billion, but profit grew 54% to $44 million, or 87 cents a share. Its gross margin rose from 13% to 19% and its operating margin jumped from 3% to 6%. The company has less-than-ideal liquidity, evident in its quick ratio of 0.8. But a debt-to-equity ratio of 0.2 indicates modest leverage.

The stock: Casey's is up 35% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 15, a discount to the market and food retail peers. Shares pay a 1.1% dividend yield.

Emergency Medical Services ( EMS) provides urgent health-care services in the U.S.

The numbers: Second-quarter profit increased 58% to $29 million, or 67 cents a share, as revenue grew 12% to $637 million. Its gross margin rose from 12% to 14% and its operating margin jumped from 6% to 9%. The company has strong liquidity, reflected by its current ratio of 2.8. A debt-to-equity ratio of 0.7 indicates reasonable leverage.

The stock: Emergency Medical has increased 27% this year, outpacing the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 20, indicating parity with the market, but a premium to health care service peers. The company doesn't pay dividends.

Ball Corp. ( BLL) manufactures metal and plastic packaging.

The numbers: Second-quarter net income increased 33% to $133 million and earnings per share jumped 37% to $1.40, boosted by a lower share count. Revenue declined 7% to $1.9 billion. Its gross margin rose from 16% to 17% and its operating margin climbed from 9% to 10%. A quick ratio of 0.5 demonstrates weak liquidity. A debt-to-equity ratio of 1.8 indicates excessive leverage.

The stock: Ball Corp. is up 18% this year, beating the Dow and S&P 500. The stock trades at a price-to-earnings ratio of 14, a discount to the market and container peers. Shares pay a 0.8% dividend yield.

Dollar Tree ( DLTR) operates discount variety stores.

The numbers: Second-quarter profit surged 51% to $57 million, or 63 cents a share, as revenue jumped 12% to $1.2 billion. Its gross margin rose from 37% to 38% and its operating margin increased from 6% to 7%. A quick ratio of 0.8 indicates less-than-ideal liquidity. But the company holds $358 million of cash, compared to $268 million of debt. A debt-to-equity ratio of 0.2 reflects fiscal prudence.

The stock: Dollar Tree has advanced 15% this year, more than the Dow, but less than the S&P 500. The stock trades at a price-to-earnings ratio of 17, a discount to the market and general merchandise peers. The company doesn't pay dividends.

TheStreet.com Ratings was given an award this year for "Best Stock Selection" among independent research providers by BNY ConvergEx Group. A rating can be viewed for any stock through our screener. Ratings are derived from a variety of fundamental and pricing figures and represent our opinion of risk-adjusted performance. However, the rating doesn't incorporate all factors that can alter a stock's performance.

-- Reported by Jake Lynch in Boston.

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