Top 5 Large-Cap Stocks That May Keep Up Their Rally in Q1 (DTV, MHS MCD, CL, GIS)

Colgate-Palmolive (NYSE: CL) has a quick ratio of 0.7, which indicates less-than-ideal liquidity. However, CL’s leverage is better than the ideal level, as the company’s debt-to-equity ratio is 1.1. CL’s shares have risen 21% over the past year, exceeding the Dow Jones Industrial Average, albeit short of the rise in the S&P 500 Index. The stock trades at a price-to-earnings ratio of 20, representing a premium to its household-products peers. Moreover, Colgate-Palmolive’s shares offer a dividend yield of 2.1%.

Although General Mills (NYSE: GIS) has poor liquidity, as reflected by its quick ratio of 0.6, its debt-to-equity ratio of 1.1 is indicative of considerable leverage. GIS’ shares appreciated 16% in 2009, underperforming all the major US indices. General Mills’ stock trades at a price-to-earnings ratio of 15, a discount to its peers in the food-products segment. GIS offers a dividend yield of 2.7%.

Shares of DirecTV (NYSE: DTV) have returned 46% in the past year, outpacing all the major US indices. DTV's operating margins have remained steady at 13% and the company has a quick ratio of 1.1, reflecting adequate liquidity. Moreover, DTV has excessive leverage, as reflected by its debt-to-equity ratio of 1.7. DTV’s stock is currently trading at a price-to-earnings ratio of 26, a premium to its media peers. However, DirecTV does not pay dividends.

Medco Health Solutions (NYSE: MHS), a pharmacy-benefit manager, gained 54% over the past year, beating the major US indices. MHS’ stock is currently trading at a price-to-earnings ratio of 27, reflecting a premium to its peers in the healthcare-service sector.

The operating margins McDonald's (NYSE: MCD) rose from 28% to 31% in 3Q09. Although MCD’s quick ratio of 0.9 is indicative of less-than-ideal liquidity, a debt-to-equity ratio of 0.8 reflects reasonable leverage. MCD's shares declined by 2% over the past year, lagging behind the major US indices. McDonald's shares offer a 3.5% dividend yield and are trading at a price-to-earnings ratio of 16, which is at a discount to its restaurant peers.