| TheStreet.com BOSTON (TheStreet) -- 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 our proprietary quantitative model, which considers more than 60 factors. They are ordered by their potential to appreciate.
New Jersey Resources The numbers: Fiscal second-quarter revenue declined 20% to $938 million as earnings surged 183% to $36 million, or 83 cents per share. The debt-to-equity ratio is low at 0.6. But a quick ratio of 0.4 indicates a weak cash position. Margins improved significantly during the quarter, with operating margin climbing past 6% and net margin jumping to 4%. The stock: New Jersey Resources is flat in 2009, underperforming the Dow Jones Industrial Average and S&P 500. The stock trades at a fair price-to-earnings ratio of 14 and offers an attractive 3.2% dividend yield. Advanced Auto Parts The numbers: First-quarter revenue increased 10% to $1.7 billion as earnings rose 14% to $94 million, or 98 cents. The operating margin remained stable at 9% and the net margin improved from 5% to 6%. Just $51 million of cash reserves and a quick ratio of 0.1 indicate a weak liquidity position. But a debt-to-equity ratio of 0.3 demonstrates modest leverage. The stock: Advanced Auto Parts has climbed 37% in 2009, beating major U.S. indices. The stock trades at an expensive price-to-earnings ratio of 18 and offers a dividend yield below 1%. UGI The numbers: Fiscal second-quarter revenue dropped 10% to $2.1 billion as net income increased 25% to $158 million and earnings per share improved 24% to $1.45, marking an eight-quarter growth streak . A quick ratio of 0.9 indicates a less-than-ideal liquidity position and a debt-to-equity ratio of 1.5 reflects sizable leverage. The operating margin improved to 17% and the net margin inched past 7% during the quarter. The stock: UGI has climbed 8% in 2009, outperforming the Dow and S&P 500. Still, the stock trades at a price-to-earnings ratio under 10, indicating a significant discount to the market, and offers a 3% dividend yield. Village Super Market The numbers: Fiscal third-quarter revenue increased 7% to $293 million as net income increased 25% to $6.3 million and earnings per share climbed 24% to 47 cents. Same-store sales, an important gauge of year-over-year improvement, jumped more than 7%. The company has a modest $36 million debt load and over $47 million of cash, which works out to a quick ratio of 0.8 and a debt-to-equity ratio of 0.2. The stock: Village Super Market has climbed 3% in 2009, in line with the Dow. The stock trades at a price-to-earnings ratio of 17 and offers a 3% dividend yield. General Mills The numbers: Fiscal fourth-quarter revenue increased 5% to $3.6 billion as earnings doubled to $358 million, or $1.07 per share. The operating margin climbed from 9% to 20% and the net margin jumped from 5% to 10%. General Mills has a weak liquidity position, as reflected by a quick ratio of 0.5, but has added $99 million to the cash balance since the year-earlier quarter. A debt-to-equity ratio of 1.4 indicates high leverage. The stock: General Mills has dropped 4% in 2009, underperforming the Dow and S&P 500. The stock trades at a fair price-to-earnings ratio of 15 and offers a 3.2% dividend yield. --Reported by Jake Lynch in Boston. Feedback can be sent to jake.lynch@thestreet.com. Independent market research, commentary, analysis and news. Learn more.
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