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Astoria Financial Corporation Stock Upgraded (AF)

NEW YORK ( TheStreet) -- Astoria Financial Corporation (NYSE: AF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat weak growth in earnings per share.

Highlights from the ratings report include:

  • The gross profit margin for ASTORIA FINANCIAL CORP is rather high; currently it is at 55.10%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, AF's net profit margin of 5.60% significantly trails the industry average.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 20.1%. Since the same quarter one year prior, revenues fell by 13.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, ASTORIA FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 25.58%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 62.06% compared to the year-earlier quarter. Looking ahead, the stock's sharp decline over the past year may have been what was needed in order to bring its value into alignment with its fundamentals and others in its industry.

Astoria Financial Corporation operates as the bank holding company for Astoria Federal Savings and Loan Association that provides various banking and financial products and services in the United States. It engages in generating deposits and originating loans. The company has a P/E ratio of 18.2, above the average banking industry P/E ratio of 17.8 and above the S&P 500 P/E ratio of 17.7. Astoria Financial has a market cap of $931.3 million and is part of the financial sector and banking industry. Shares are up 13.8% year to date as of the close of trading on Thursday.

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

-- 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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