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 (
) 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, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 4.0%. Since the same quarter one year prior, revenues rose by 13.9%. 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.
- The gross profit margin for ENERGEN CORP is rather high; currently it is at 63.79%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -2.23% trails the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.62, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.09 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 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 Oil, Gas & Consumable Fuels industry and the overall market, ENERGEN CORP's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has decreased to $245.52 million or 11.79% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, ENERGEN CORP has marginally lower results.
Energen Corporation is engaged in the development and exploration of oil, natural gas, and natural gas liquids in the continental United States. Energen has a market cap of $5.6 billion and is part of the basic materials sector and energy industry. Shares are up 11% year to date as of the close of trading on Tuesday.
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