Exelon (EXC) transmits and distributes electricity in northern Illinois, as well as electricity and natural gas in southeastern Pennsylvania. It has been rated a buy since January 2007. The company's revenue grew by 14.3% to $5.03 billion in the third quarter compared with the same period last year, aided by an increase in wholesale and retail electric sales from its generation division. The company swung to a net profit of $780 million, or $1.15 per share, in the third quarter from a loss of $44 million, or 7 cents a share, in the same period last year. Income growth came from higher margins on energy sales, higher nuclear output and favorable weather. Stockholders' equity edged up 7.3% to $10.51 billion, improving the company's debt-to-equity ratio.

Air Products and Chemicals (APD), a chemical and gas producer, has been rated a buy since December 2005 on the basis of its strong revenue growth, expanding margins and increased net income, coupled with a notable return on equity. Higher pricing and volumes across various business segments have supported the revenue growth. Fiscal-year fourth-quarter profit increased 128% over a year ago, led by higher net sales, to $292.80 million or $1.31 a share. Sales climbed by 10.3% to $2.60 billion during the same time frame, due to higher pricing and volumes in the merchant gases segment and higher volumes in its tonnage gases and electronics & performance materials segment.

FPL Group (FPL) produces electricity using natural gas, wind, nuclear, oil, hydro and other resources. It has been rated a buy since December 2005. The company's strong capacity addition plans, combined with improved margin, may lead to an impressive financial performance in the future. FPL Group has been expanding its energy infrastructure to support growing energy demand. It is also diversifying its fuel mix from natural gas toward wind and nuclear power in response to concerns about greenhouse emissions and escalating commodity prices. The company projects its earnings for fiscal 2007 to be near $3.45 per share, compared with $3.23 a share in fiscal 2006. Management has also raised its earnings projection for fiscal 2008 to be in the range of $3.83 to $3.93 per share.

Praxair (PX) produces, sells and distributes industrial gases. It has been rated a buy since November 2005. The buy rating is supported by the company's strong revenue growth, expanding profit margins, increased net income and notable return on equity. Third-quarter profit climbed 23% to $305 million, or 94 cents a share, while revenue increased 13% to $2.37 billion. The company's Asian and South American segments grew the most, supported by new business and project start-ups, while North America saw continued stable growth. Higher sales, improved pricing, cost efficiency and productivity programs helped the gross profit margin grow by 121 basis points to 41.23%.

Railroad operator Union Pacific (UNP) has been rated a buy since October 2005. The company's diversified business model and growth initiatives leave it well-positioned to gain from positive trends in the railroad industry. Third-quarter profit climbed 27% over a year ago to $532 million, or $2 a share. Revenue climbed 5% to $4.19 billion. Union Pacific has a diversified business model and serves a broad range of customers, putting the company in a strong competitive position and making it less vulnerable to softness in the housing and auto industries. Tightness in trucking capacity due to a driver shortage, increased highway congestion and higher fuel prices has resulted in higher demand for rail transport recently. Also, with double-stacked railcars and computer-guided systems, railroads are becoming more competitive than trucks.