Parker Hannifin Corporation Stock Buy Recommendation Reiterated (PH)

Editor's Note: 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.

NEW YORK (TheStreet) -- Parker Hannifin Corporation (NYSE:PH) has been reiterated by TheStreet Ratings as a buy with a ratings score of B . The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

• EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass

Highlights from the ratings report include:

• The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.02, which illustrates the ability to avoid short-term cash problems.
• Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. 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.
• Regardless of the drop in revenue, the company managed to outperform against the industry average of 1.0%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
• PARKER-HANNIFIN CORP's earnings per share declined by 17.8% 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, PARKER-HANNIFIN CORP increased its bottom line by earning $7.44 versus $6.37 in the prior year. For the next year, the market is expecting a contraction of 13.9% in earnings ($6.41 versus $7.44).

Parker Hannifin Corporation manufactures fluid power systems, electromechanical controls, and related components worldwide. Parker Hannifin has a market cap of $13.18 billion and is part of the industrial goods sector and industrial industry. The company has a P/E ratio of 12.4, below the S&P 500 P/E ratio of 17.7. Shares are up 3.8% year to date as of the close of trading on Wednesday.

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

--Written by a member of TheStreet Ratings Staff.

HOLIDAY SPECIAL: Let Jim Cramer show you every trade he is making in his $2.5 Million portfolio. Join now for 14-days FREE. Sign up today to get e-mail alerts before every trade

For more information on Parker Hannifin Corporation click any of the following:

• Parker Hannifin Corporation Stock Price

• Parker Hannifin Corporation Analyst Ratings

• Parker Hannifin Corporation Key Stats & Profile

• Parker Hannifin Corporation Earnings

• Parker Hannifin Corporation Ratio Comparison

• Parker Hannifin Corporation Growth Rates

• Parker Hannifin Corporation Balance Sheet

• Parker Hannifin Corporation Cash Flow

• Parker Hannifin Corporation Income Statement