NEW YORK (TheStreet) -- Oil prices tumbled again on Monday, hitting a six-year low.

That could mean fresh news of impending doom for stocks in the energy sector, despite oil's recent rise. TheStreet's oil expert Daniel Dicker suggests that it's going to get a lot worse before it gets better for U.S. oil companies.

But are all stocks in the energy sector a sell? Not so, according to TheStreet Ratings, TheStreet's proprietary research tool.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

The stocks on this list are all large-cap companies in the energy sector with Buy, A- or better ratings. Year-to-date returns are based on March 16, 2015 closing prices.

BHI Chart BHI data by YCharts

1.Baker Hughes Inc. (BHI)
Rating: Buy, A-
Market Cap: $26 billion
Year-to-date return: 6.5%

Baker Hughes Incorporated supplies oilfield services, products, technology, and systems to the oil and natural gas industry worldwide.

"We rate BAKER HUGHES INC (BHI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Energy Equipment & Services industry. The net income increased by 167.3% when compared to the same quarter one year prior, rising from $248.00 million to $663.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 14.6%. Since the same quarter one year prior, revenues rose by 13.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • BHI's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BHI has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $1,199.00 million or 19.54% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 4.07%.
  • BAKER HUGHES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, BAKER HUGHES INC increased its bottom line by earning $3.92 versus $2.47 in the prior year. For the next year, the market is expecting a contraction of 49.0% in earnings ($2.00 versus $3.92).
BPL Chart BPL data by YCharts

2. Buckeye Partners (BPL)
Rating: Buy, A-
Market Cap: $9.6 billion
Year-to-date return: -2.3%

Buckeye Partners, L.P. owns and operates liquid petroleum products pipeline systems in the United States. The company operates through four segments: Pipelines & Terminals, Global Marine Terminals, Merchant Services, and Development & Logistics.

"We rate BUCKEYE PARTNERS LP (BPL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its compelling growth in net income and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 168.3% when compared to the same quarter one year prior, rising from -$82.75 million to $56.52 million.
  • Net operating cash flow has significantly increased by 316.91% to $417.29 million when compared to the same quarter last year. In addition, BUCKEYE PARTNERS LP has also vastly surpassed the industry average cash flow growth rate of -11.94%.
  • BUCKEYE PARTNERS LP's earnings per share declined by 33.3% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, BUCKEYE PARTNERS LP reported lower earnings of $2.79 versus $3.23 in the prior year. This year, the market expects an improvement in earnings ($3.59 versus $2.79).
  • BPL, with its decline in revenue, slightly underperformed the industry average of 19.6%. Since the same quarter one year prior, revenues fell by 24.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The gross profit margin for BUCKEYE PARTNERS LP is rather low; currently it is at 15.04%. Regardless of BPL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, BPL's net profit margin of 4.53% compares favorably to the industry average.

 

SEP Chart SEP data by YCharts

3. Spectra Energy Partners (SEP)
Rating: Buy, A-
Market Cap: $14.8 billion
Year-to-date return: -13.1%

Spectra Energy Partners, LP operates as an investment arm of Spectra Energy Corp.

"We rate SPECTRA ENERGY PARTNERS LP (SEP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 15.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The gross profit margin for SPECTRA ENERGY PARTNERS LP is rather high; currently it is at 61.94%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 47.24% significantly outperformed against the industry average.
  • The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.30 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • SPECTRA ENERGY PARTNERS LP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, SPECTRA ENERGY PARTNERS LP reported lower earnings of $2.84 versus $7.16 in the prior year. This year, the market expects an improvement in earnings ($2.93 versus $2.84).
  • The change in net income from the same quarter one year ago has exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has significantly decreased by 47.6% when compared to the same quarter one year ago, falling from $540.00 million to $283.00 million.

 

VLO Chart VLO data by YCharts

4. Valero Energy Corp. (VLO - Get Report)
Rating: Buy, A-
Market Cap: $29.8 billion
Year-to-date return: 20%

Valero Energy Corporation operates as an independent petroleum refining and marketing company in the United States, Canada, the Caribbean, the United Kingdom, and Ireland. It operates through two segments, Refining and Ethanol.

"We rate VALERO ENERGY CORP (VLO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and increase in stock price during the past year. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.31, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.97 is somewhat weak and could be cause for future problems.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, VALERO ENERGY CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 19.6%. Since the same quarter one year prior, revenues fell by 19.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Oil, Gas & Consumable Fuels industry average, but is less than that of the S&P 500. The net income has decreased by 10.3% when compared to the same quarter one year ago, dropping from $1,288.00 million to $1,155.00 million.

 

MPC Chart MPC data by YCharts

5. Marathon Petroleum Corp. (MPC - Get Report)
Rating: Buy, A
Market Cap: $26.1 billion
Year-to-date return: 8.2%

Marathon Petroleum Corporation, together with its subsidiaries, engages in refining, marketing, retailing, and transporting petroleum products primarily in the United States. It operates through three segments: Refining & Marketing, Speedway, and Pipeline Transportation.

"We rate MARATHON PETROLEUM CORP (MPC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MARATHON PETROLEUM CORP has improved earnings per share by 38.2% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, MARATHON PETROLEUM CORP increased its bottom line by earning $8.84 versus $6.61 in the prior year. This year, the market expects an improvement in earnings ($9.30 versus $8.84).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 27.5% when compared to the same quarter one year prior, rising from $626.00 million to $798.00 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that MPC's debt-to-equity ratio is low, the quick ratio, which is currently 0.65, displays a potential problem in covering short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, MARATHON PETROLEUM CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

 

TSO Chart TSO data by YCharts

6. Tesoro Corp. (TSO)
Rating: Buy, A
Market Cap: $10.6 billion
Year-to-date return: 16.5%

Tesoro Corporation, through its subsidiaries, engages in petroleum refining and marketing activities in the United States. It operates in three segments: Refining, Tesoro Logistics LP (TLLP), and Retail.

"We rate TESORO CORP (TSO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, attractive valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 4566.66% and other important driving factors, this stock has surged by 54.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TSO should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • TESORO CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TESORO CORP increased its bottom line by earning $6.69 versus $2.83 in the prior year. This year, the market expects an improvement in earnings ($7.12 versus $6.69).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 2171.4% when compared to the same quarter one year prior, rising from -$7.00 million to $145.00 million.
  • Net operating cash flow has significantly increased by 67.72% to $317.00 million when compared to the same quarter last year. In addition, TESORO CORP has also vastly surpassed the industry average cash flow growth rate of -11.94%.

MMP Chart MMP data by YCharts

6. Magellan Midstream Partners LP (MMP - Get Report)
Rating: Buy, A+
Market Cap: $17.7 billion
Year-to-date return: -9.8%

Magellan Midstream Partners, L.P. engages in the transportation, storage, and distribution of refined petroleum products and crude oil in the United States. It operates in three segments: Refined Products, Crude Oil, and Marine Storage.

"We rate MAGELLAN MIDSTREAM PRTNRS LP (MMP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 19.6%. Since the same quarter one year prior, revenues rose by 15.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, MAGELLAN MIDSTREAM PRTNRS LP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for MAGELLAN MIDSTREAM PRTNRS LP is rather high; currently it is at 53.62%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 37.78% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 56.68% to $393.99 million when compared to the same quarter last year. In addition, MAGELLAN MIDSTREAM PRTNRS LP has also vastly surpassed the industry average cash flow growth rate of -11.94%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 32.7% when compared to the same quarter one year prior, rising from $190.01 million to $252.09 million.