NEW YORK (TheStreet) -- Government Properties Income (NYSE:GOV) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 17.8%. Since the same quarter one year prior, revenues rose by 28.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels.
- GOVERNMENT PPTYS INCOME TR has improved earnings per share by 12.0% 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, GOVERNMENT PPTYS INCOME TR increased its bottom line by earning $1.06 versus $0.83 in the prior year. This year, the market expects an improvement in earnings ($1.07 versus $1.06).
- Net operating cash flow has significantly increased by 75.35% to $29.31 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 25.40%.
-- Written by a member of TheStreet Ratings Staff
TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
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