NEW YORK (
-- Developers Diversified Realty
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we find that the company's profit margins have been poor overall.
Highlights from the ratings report include:
- The gross profit margin for DEVELOPERS DIVERSIFIED RLTY is currently lower than what is desirable, coming in at 30.90%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 17.00% trails that of the industry average.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, DEVELOPERS DIVERSIFIED RLTY's return on equity significantly trails that of both the industry average and the S&P 500.
- Even though the current debt-to-equity ratio is 1.31, it is still below the industry average, suggesting that this level of debt is acceptable within the Real Estate Investment Trusts (REITs) industry.
- DEVELOPERS DIVERSIFIED RLTY 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. This trend suggests that the performance of the business is improving. During the past fiscal year, DEVELOPERS DIVERSIFIED RLTY continued to lose money by earning -$0.79 versus -$1.18 in the prior year. This year, the market expects an improvement in earnings ($0.00 versus -$0.79).
- Powered by its strong earnings growth of 107.14% and other important driving factors, this stock has surged by 25.81% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
Developers Diversified Realty Corporation (DDR) operates as a real estate investment trust (REIT) in the United States. The company engages in acquiring, developing, redeveloping, owning, leasing, and managing shopping centers, mini-malls, and lifestyle centers. Developers Diversified has a market cap of $4 billion and is part of the
industry. Shares are up 3.8% year to date as of the close of trading on Friday.
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