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Noble Corporation Stock Buy Recommendation Reiterated (NE)

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) -- Noble Corporation (NYSE:NE) 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 robust revenue growth, impressive record of earnings per share growth, expanding profit margins, 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 has had lackluster performance in the stock itself.

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Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 7.8%. Since the same quarter one year prior, revenues rose by 21.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • NOBLE CORP has improved earnings per share by 25.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NOBLE CORP increased its bottom line by earning $2.05 versus $1.45 in the prior year. This year, the market expects an improvement in earnings ($2.89 versus $2.05).
  • 47.40% is the gross profit margin for NOBLE CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.45% is above that of the industry average.
  • Net operating cash flow has significantly increased by 95.30% to $202.55 million when compared to the same quarter last year. In addition, NOBLE CORP has also vastly surpassed the industry average cash flow growth rate of 28.40%.
  • NE's debt-to-equity ratio of 0.61 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.36 is sturdy.

Noble Corporation operates as an offshore drilling contractor for the oil and gas industry. The company offers contract drilling services for oil and gas wells. Noble has a market cap of $9.3 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 17.00, below the S&P 500 P/E ratio of 18.00. Shares are up 3.4% year to date as of the close of trading on Friday.

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

--Written by a member of TheStreet Ratings Staff.

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