MGE Energy, Grainger: Top 5 Value Stocks

BOSTON ( TheStreet) -- These companies have more than $500 million in annual revenue, below-average valuations, debt that's less than 49% of total capital and "buy" ratings from our 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 electricity provider.

The numbers: Second-quarter net income dropped 6% to $10 million, or 43 cents a share. 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. A debt-to-equity ratio of 0.7 is below the industry average, indicating restrained leverage.

The stock: MGE has advanced 10% this year, less than the Dow Jones Industrial Average and S&P 500 Index. The stock trades at a price-to-earnings ratio of 15, a discount to the market and utility peers. The shares pay a 4.1% dividend yield.

W.W. Grainger ( GWW) sells a wide array of commercial equipment, including duct tape, office furniture and air compressors.

The numbers: Third-quarter net income increased 3% to $145 million, or $1.88 a share. Revenue fell 14% to $1.6 billion. Its gross margin was unchanged at 42%, and its operating margin declined from 13% to 12%. The company has a strong financial position, with $672 million of cash and $535 million of debt.

The stock: Grainger is up 21% this year, matching the S&P 500. The stock trades at a price-to-earnings ratio of 17, a discount to the market and distributor peers. The shares pay a 1.9% 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. A debt-to-equity ratio of 0.2 indicates modest leverage.

The stock: Casey's is up 44% this year, beating major U.S. indices. The stock trades at a price-to-earnings ratio of 16, a discount to the market and food retaileres. The shares pay a 1% dividend yield.

Silgan ( SLGN) makes metal and plastic packaging.

The numbers: Second-quarter profit increased 1% to $34 million, or 88 cents a share, as revenue dropped 6% to $690 million. Its gross margin increased from 19% to 20%, and its operating margin remained steady at 9%. A quick ratio of 0.8 reflects less-than-ideal liquidity. A debt-to-equity ratio of 1.7 indicates excessive leverage.

The stock: Silgan has advanced 16% this year, beating the Dow, but underperforming the S&P 500. The stock trades at a price-to-earnings ratio of 15, a discount to the market and container peers. The shares pay a 1.4% dividend yield.

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

The numbers: Second-quarter net income increased 33% to $133 million, or $1.40 a share. 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 24% 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. The shares pay a 0.8% dividend yield.

-- Reported by Jake Lynch in Boston.

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