NEW YORK (TheStreet) -- Shares of Hartford Financial Services Group Inc. (HIG - Get Report) are up 1.54% to $35.00 in after-market trading on Monday, following the release of the company's first quarter 2014 earnings report.
The insurance and financial services company reported that its first quarter core earnings rose to $564 million, a 23% increase from the $457 million reported during the same quarter in 2013.
Net income improved as the company reported $495 million, or $1.03 per diluted share, compared to $241 million, or $0.58 per diluted share from the first quarter 2013.
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TheStreet Ratings team rates HARTFORD FINANCIAL SERVICES as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HARTFORD FINANCIAL SERVICES (HIG) a BUY. This is driven by some important positives, 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 impressive record of earnings per share growth, solid stock price performance, largely solid financial position with reasonable debt levels by most measures, notable return on equity and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HARTFORD FINANCIAL SERVICES reported significant earnings per share improvement 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, HARTFORD FINANCIAL SERVICES turned its bottom line around by earning $0.54 versus -$0.33 in the prior year. This year, the market expects an improvement in earnings ($3.63 versus $0.54).
- Powered by its strong earnings growth of 600.00% and other important driving factors, this stock has surged by 25.48% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- HIG, with its decline in revenue, underperformed when compared the industry average of 10.8%. Since the same quarter one year prior, revenues fell by 21.5%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.35, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further.
- 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 Insurance industry and the overall market on the basis of return on equity, HARTFORD FINANCIAL SERVICES underperformed against that of the industry average and is significantly less than that of the S&P 500.
- You can view the full analysis from the report here: HIG Ratings Report