Rating Change #1
Denbury Resources Inc
(DNR - 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 revenue growth, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- DNR's revenue growth has slightly outpaced the industry average of 2.7%. Since the same quarter one year prior, revenues slightly increased by 0.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The gross profit margin for DENBURY RESOURCES INC is currently very high, coming in at 72.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 35.50% significantly outperformed against the industry average.
- Net operating cash flow has increased to $440.97 million or 10.65% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.55%.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, DENBURY RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- DENBURY RESOURCES INC's earnings per share declined by 15.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DENBURY RESOURCES INC increased its bottom line by earning $1.41 versus $0.76 in the prior year. For the next year, the market is expecting a contraction of 1.4% in earnings ($1.39 versus $1.41).
Denbury Resources Inc. engages in the acquisition, development, exploitation, and exploration of oil and natural gas properties in the Gulf Coast region located in Mississippi, Texas, Louisiana, and Alabama. The company has a P/E ratio of 9.3, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Denbury has a market cap of $5.99 billion and is part of the
industry. Shares are up 1.4% year to date as of the close of trading on Friday.
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-- Reported by Kevin Baker in Palm Beach Gardens, Fla.
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