Rating Change #5
(HI - 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, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 12.9%. 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 current debt-to-equity ratio, 0.56, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 1.00 is somewhat weak and could be cause for future problems.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- 42.50% is the gross profit margin for HILLENBRAND INC which we consider to be strong. Regardless of HI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HI's net profit margin of 8.90% compares favorably to the industry average.
Hillenbrand, Inc. designs, manufactures, distributes, and sells funeral service products to licensed funeral directors operating licensed funeral homes. The company has a P/E ratio of 11.2, equal to the average industrial industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Hillenbrand has a market cap of $1.16 billion and is part of the
industry. Shares are down 16.8% year to date as of the close of trading on Thursday.
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