NEW YORK (TheStreet) -- Greenhill & Co. Inc. (GHL - Get Report) is trading higher 1.29% to $48.69 on Wednesday.
The independent investment bank was upgraded to "neutral' from "reduce" at Nomura Holdings (NMR - Get Report).
The firm said the ratings change was the result of improvement in the backlog and the company's offering of a 4% dividend yield.
TheStreet Ratings team rates GREENHILL & CO INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate GREENHILL & CO INC (GHL) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, notable return on equity and increase in net income. 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:
- GREENHILL & CO INC has improved earnings per share by 6.0% 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, GREENHILL & CO INC increased its bottom line by earning $1.56 versus $1.38 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $1.56).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Capital Markets industry and the overall market, GREENHILL & CO INC's return on equity exceeds that of both the industry average and the S&P 500.
- GHL, with its decline in revenue, slightly underperformed the industry average of 7.7%. Since the same quarter one year prior, revenues fell by 17.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed against the S&P 500 and did not exceed that of the Capital Markets industry. The net income increased by 4.3% when compared to the same quarter one year prior, going from $15.13 million to $15.78 million.
- The gross profit margin for GREENHILL & CO INC is currently lower than what is desirable, coming in at 29.15%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 20.67% is above that of the industry average.
- You can view the full analysis from the report here: GHL Ratings Report