Boardwalk Pipeline Partners LP Stock Upgraded (BWP)

NEW YORK (TheStreet) -- Boardwalk Pipeline Partners (NYSE:BWP) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

• BWP's revenue growth trails the industry average of 33.0%. Since the same quarter one year prior, revenues slightly increased by 4.4%. 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 BOARDWALK PIPELINE PRTNRS-LP is rather high; currently it is at 55.20%. Regardless of BWP's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BWP's net profit margin of 17.60% compares favorably to the industry average.
• BOARDWALK PIPELINE PRTNRS-LP's earnings per share declined by 17.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BOARDWALK PIPELINE PRTNRS-LP increased its bottom line by earning $1.48 versus $0.87 in the prior year. For the next year, the market is expecting a contraction of 13.2% in earnings ($1.29 versus $1.48).
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income has decreased by 15.4% when compared to the same quarter one year ago, dropping from $55.80 million to $47.20 million.
• Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, BWP has underperformed the S&P 500 Index, declining 14.28% from its price level of one year ago. Despite the decline in its share price over the last year, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry. We feel, however, that other strengths this company displays compensate for this.

Boardwalk Pipeline Partners, LP, through its subsidiaries, engages in the interstate transportation and storage of natural gas in the United States. The company has a P/E ratio of 23.9, above the average energy industry P/E ratio of 22.9 and above the S&P 500 P/E ratio of 17.7. Boardwalk Pipeline has a market cap of $4.9 billion and is part of the basic materials sector and energy industry. Shares are down 10.3% year to date as of the close of trading on Thursday.

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