Rating Change #3
Eaton Vance Corporation
(EV - Get Report)
has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- 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. Compared to other companies in the Capital Markets industry and the overall market, EATON VANCE CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has significantly increased by 1101.64% to $56.57 million when compared to the same quarter last year. In addition, EATON VANCE CORP has also vastly surpassed the industry average cash flow growth rate of 223.99%.
- EATON VANCE CORP's earnings per share declined by 12.0% 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, EATON VANCE CORP increased its bottom line by earning $1.75 versus $1.41 in the prior year. This year, the market expects an improvement in earnings ($1.88 versus $1.75).
- Despite the weak revenue results, EV has outperformed against the industry average of 19.4%. Since the same quarter one year prior, revenues slightly dropped by 3.4%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- Despite the current debt-to-equity ratio of 1.91, it is still below the industry average, suggesting that this level of debt is acceptable within the Capital Markets industry.
Eaton Vance Corp., through its subsidiaries, engages in the creation, marketing, and management of investment funds in the United States. It also provides investment management and counseling services to institutions and individuals. The company has a P/E ratio of 15.4, equal to the average financial services industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Eaton Vance has a market cap of $3.17 billion and is part of the
industry. Shares are up 16.5% year to date as of the close of trading on Friday.
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