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 reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, 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.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 1.2%. 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.
- Net operating cash flow has increased to $675.00 million or 15.38% when compared to the same quarter last year. In addition, DOMINION RESOURCES INC has also modestly surpassed the industry average cash flow growth rate of 12.19%.
- DOMINION RESOURCES INC has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, DOMINION RESOURCES INC reported lower earnings of $0.56 versus $2.48 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $0.56).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. 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 gross profit margin for DOMINION RESOURCES INC is currently lower than what is desirable, coming in at 32.00%. Regardless of D's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, D's net profit margin of -20.80% significantly underperformed when compared to the industry average.
Dominion Resources, Inc., together with its subsidiaries, engages in producing and transporting energy in the United States. The company operates through three segments: Dominion Virginia Power (DVP), Dominion Generation, and Dominion Energy. Dominion has a market cap of $35.2 billion and is part of the utilities sector and utilities industry. The company has a P/E ratio of 107.00, above the S&P 500 P/E ratio of 18.00. Shares are up 17.8% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.