NEW YORK (TheStreet) -- Questar Corp (STR - Get Report) has been initiated with a "hold" rating and $24 price target, Jefferies said Wednesday. The firm said the company offers exposure to the entire natural gas value chain and that the stock offers a defensive equity play with high returns and attractive dividend growth.
Separately, TheStreet Ratings team rates QUESTAR CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate QUESTAR CORP (STR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, increase in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.4%. Since the same quarter one year prior, revenues rose by 16.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- QUESTAR CORP has improved earnings per share by 8.3% 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, QUESTAR CORP reported lower earnings of $0.91 versus $1.19 in the prior year. This year, the market expects an improvement in earnings ($1.24 versus $0.91).
- The net income growth from the same quarter one year ago has exceeded that of the Gas Utilities industry average, but is less than that of the S&P 500. The net income increased by 6.7% when compared to the same quarter one year prior, going from $63.80 million to $68.10 million.
- The gross profit margin for QUESTAR CORP is rather high; currently it is at 51.55%. Regardless of STR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, STR's net profit margin of 17.11% compares favorably to the industry average.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Gas Utilities industry and the overall market on the basis of return on equity, QUESTAR CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full analysis from the report here: STR Ratings Report