NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, solid stock price performance, growth in earnings per share and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
Highlights from the ratings report include:
- AES's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Independent Power Producers & Energy Traders industry. The net income increased by 52.1% when compared to the same quarter one year prior, rising from -$436.00 million to -$209.00 million.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. 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.
- AES CORP has improved earnings per share by 23.5% 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, AES CORP reported lower earnings of $0.59 versus $0.63 in the prior year. This year, the market expects an improvement in earnings ($1.30 versus $0.59).
- 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. When compared to other companies in the Independent Power Producers & Energy Traders industry and the overall market, AES CORP's return on equity is below that of both the industry average and the S&P 500.
The AES Corporation, through its subsidiaries, operates as a power company in Latin America, Africa, North America, Europe, the Middle East, and Asia. The company owns and operates two businesses, Generation and Utilities. AES has a market cap of $9.78 billion and is part of the
industry. Shares are up 15.7% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet RatingsStaff