Chemical Financial Corporation Stock Upgraded (CHFC)

NEW YORK (TheStreet) -- Chemical Financial Corporation (Nasdaq:CHFC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, expanding profit margins, good cash flow from operations, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

• CHEMICAL FINANCIAL CORP has improved earnings per share by 31.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CHEMICAL FINANCIAL CORP increased its bottom line by earning $0.86 versus $0.42 in the prior year. This year, the market expects an improvement in earnings ($1.54 versus $0.86).
• The gross profit margin for CHEMICAL FINANCIAL CORP is currently very high, coming in at 78.30%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CHFC's net profit margin of 17.80% significantly trails the industry average.
• Net operating cash flow has significantly increased by 84.41% to $9.11 million when compared to the same quarter last year. Despite an increase in cash flow of 84.41%, CHEMICAL FINANCIAL CORP is still growing at a significantly lower rate than the industry average of 301.96%.
• CHFC, with its decline in revenue, slightly underperformed the industry average of 2.2%. Since the same quarter one year prior, revenues slightly dropped by 2.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
• The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Commercial Banks industry and the overall market, CHEMICAL FINANCIAL CORP's return on equity is below that of both the industry average and the S&P 500.

Chemical Financial Corporation operates as the holding company for Chemical Bank that offers commercial banking services in Michigan. The company has a P/E ratio of 13.4, below the average banking industry P/E ratio of 13.5 and below the S&P 500 P/E ratio of 17.7. Chemical Financial has a market cap of $529.4 million and is part of the financial sector and banking industry. Shares are down 11.6% year to date as of the close of trading on Monday.

You can view the full Chemical Financial Ratings Report or get investment ideas from our investment research center.

 

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