Rating Change #5
Worthington Industries (WOR) 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, notable return on equity, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- WORTHINGTON INDUSTRIES has improved earnings per share by 35.0% 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 year. We feel that this trend should continue. During the past fiscal year, WORTHINGTON INDUSTRIES increased its bottom line by earning $1.55 versus $0.57 in the prior year. This year, the market expects an improvement in earnings ($1.60 versus $1.55).
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Metals & Mining industry and the overall market, WORTHINGTON INDUSTRIES's return on equity exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $64.36 million or 8.23% when compared to the same quarter last year. Despite an increase in cash flow of 8.23%, WORTHINGTON INDUSTRIES is still growing at a significantly lower rate than the industry average of 71.43%.
- The revenue fell significantly faster than the industry average of 72.9%. Since the same quarter one year prior, revenues slightly dropped by 1.8%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- WOR's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.82 is weak.
Worthington Industries, Inc. operates as a diversified metals processing company focusing on steel processing and manufactured metal products in the United States, Canada, and Europe. The company has a P/E ratio of 11.1, above the average metals & mining industry P/E ratio of 11 and below the S&P 500 P/E ratio of 17.7. Worthington has a market cap of $1.24 billion and is part of the basic materials sector and metals & mining industry. Shares are up 7.7% year to date as of the close of trading on Friday.You can view the full Worthington Ratings Report or get investment ideas from our investment research center.
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