Dresser-Rand Group Inc. Stock Upgraded (DRC)

NEW YORK (TheStreet) -- Dresser-Rand Group (NYSE:DRC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:

• The net income growth from the same quarter one year ago has significantly exceeded that of the Energy Equipment & Services industry average, but is less than that of the S&P 500. The net income increased by 6.1% when compared to the same quarter one year prior, going from $37.50 million to $39.80 million.
• Despite its growing revenue, the company underperformed as compared with the industry average of 35.8%. Since the same quarter one year prior, revenues rose by 30.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 32.72% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
• DRESSER-RAND GROUP INC has improved earnings per share by 10.9% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DRESSER-RAND GROUP INC reported lower earnings of $1.80 versus $2.57 in the prior year. This year, the market expects an improvement in earnings ($1.96 versus $1.80).
• The debt-to-equity ratio of 1.26 is relatively high when compared with the industry average, suggesting a need for better debt level management. To add to this, DRC has a quick ratio of 0.59, this demonstrates the lack of ability of the company to cover short-term liquidity needs.

Dresser-Rand Group Inc. The company has a P/E ratio of 40.3, above the average industrial industry P/E ratio of 40 and above the S&P 500 P/E ratio of 17.7. Dresser-Rand Group has a market cap of $3.9 billion and is part of the industrial goods sector and industrial industry. Shares are up 21.2% year to date as of the close of trading on Tuesday.

You can view the full Dresser-Rand Group Ratings Report or get investment ideas from our investment research center.

 

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• Dresser-Rand Group Inc. Stock Price

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• Dresser-Rand Group Inc. Key Stats & Profile

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• Dresser-Rand Group Inc. Ratio Comparison

• Dresser-Rand Group Inc. Growth Rates

• Dresser-Rand Group Inc. Balance Sheet

• Dresser-Rand Group Inc. Cash Flow

• Dresser-Rand Group Inc. Income Statement