Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, premium valuation and weak operating cash flow.
- ACTIVE STOCK TRADERS: Check out TheStreet's special offer for Real Money, headlined by Jim Cramer, now!
Highlights from the ratings report include:
- DEL's revenue growth has slightly outpaced the industry average of 5.0%. Since the same quarter one year prior, revenues rose by 15.0%. Growth in the company's revenue appears to have helped boost 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 Paper & Forest Products industry. The net income increased by 71.1% when compared to the same quarter one year prior, rising from $2.06 million to $3.52 million.
- DEL's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.79 is somewhat weak and could be cause for future problems.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Paper & Forest Products industry and the overall market on the basis of return on equity, DELTIC TIMBER CORP underperformed against that of the industry average and is significantly less than that of the S&P 500.
Deltic Timber Corporation, a natural resources company, together with its subsidiaries, grows and harvests timber, as well as manufactures and markets lumber. The company has a P/E ratio of 185.6, below the average materials & construction industry P/E ratio of 185.9 and above the S&P 500 P/E ratio of 17.7. Deltic Timber has a market cap of $776.6 million and is part of the
industry. Shares are up 2% year to date as of the close of trading on Monday.
You can view the full
or get investment ideas from our
-- Written by a member of TheStreet Ratings Staff