3 Stocks Reiterated As A Buy: HON, SO, GS
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
NEW YORK (TheStreet) -- TheStreet Ratings team reiterated 3 stocks with a buy rating on Tuesday based on 32 different data factors including general market action, fundamental analysis and technical indicators. The in-depth analysis of these ratings decisions goes as follows:
Honeywell International Inc:
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, largely solid financial position with reasonable debt levels by most measures, growth in earnings per share, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.
Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- The current debt-to-equity ratio, 0.49, 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 1.01, which illustrates the ability to avoid short-term cash problems.
- HONEYWELL INTERNATIONAL INC reported flat earnings per share in the most recent quarter. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HONEYWELL INTERNATIONAL INC increased its bottom line by earning $5.33 versus $4.92 in the prior year. This year, the market expects an improvement in earnings ($6.10 versus $5.33).
- 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 Aerospace & Defense industry and the overall market on the basis of return on equity, HONEYWELL INTERNATIONAL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has slightly increased to $1,762.00 million or 5.63% when compared to the same quarter last year. Despite an increase in cash flow, HONEYWELL INTERNATIONAL INC's cash flow growth rate is still lower than the industry average growth rate of 19.41%.
- You can view the full analysis from the report here: Honeywell International Ratings Report
Honeywell International Inc. operates as a diversified technology and manufacturing company worldwide. Honeywell International has a market cap of $80.4 billion and is part of the industrial goods sector and industrial industry. Shares are up 4.7% year-to-date as of the close of trading on Monday.
Southern Co:
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B+. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its revenue growth 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.
Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SOUTHERN CO's earnings per share declined by 29.8% 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, SOUTHERN CO increased its bottom line by earning $2.20 versus $1.87 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.20).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, the stock's 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 the other strengths this company displays justify these higher price levels.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electric Utilities industry. The net income has significantly decreased by 26.4% when compared to the same quarter one year ago, falling from $431.00 million to $317.00 million.
- The gross profit margin for SOUTHERN CO is currently lower than what is desirable, coming in at 26.82%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.82% trails that of the industry average.
- You can view the full analysis from the report here: Southern Ratings Report
The Southern Company, together with its subsidiaries, operates as a public electric utility company. Southern has a market cap of $41.2 billion and is part of the utilities sector and utilities industry. Shares are down 8.6% year-to-date as of the close of trading on Monday.
Goldman Sachs Group Inc:
(NYSE:
) has been reiterated by TheStreet Ratings as a buy with a ratings score of A-. According to TheStreet Ratings team: The company's strengths can be seen in multiple areas, such as its attractive valuation levels, expanding profit margins, good cash flow from operations and solid stock price performance. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the ratings report include:
- The gross profit margin for GOLDMAN SACHS GROUP INC is rather high; currently it is at 52.44%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.49% is above that of the industry average.
- Net operating cash flow has significantly increased by 117.89% to $4,968.00 million when compared to the same quarter last year. In addition, GOLDMAN SACHS GROUP INC has also vastly surpassed the industry average cash flow growth rate of -6.01%.
- GOLDMAN SACHS GROUP INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, GOLDMAN SACHS GROUP INC increased its bottom line by earning $17.07 versus $15.47 in the prior year. This year, the market expects an improvement in earnings ($17.20 versus $17.07).
- 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.
- You can view the full analysis from the report here: Goldman Sachs Group Ratings Report
The Goldman Sachs Group, Inc. operates as an investment banking, securities, and investment management company worldwide. The company operates through four segments: Investment Banking, Institutional Client Services, Investing & Lending, and Investment Management. Goldman Sachs Group has a market cap of $82.7 billion and is part of the financial sector and financial services industry. Shares are down 1.1% year-to-date as of the close of trading on Monday.
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