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NEW YORK (

TheStreet

)

-- Enpro Industries

(NYSE:

NPO

) 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, largely solid financial position with reasonable debt levels by most measures, increase in net income, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:

  • NPO's very impressive revenue growth exceeded the industry average of 30.5%. Since the same quarter one year prior, revenues leaped by 54.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The debt-to-equity ratio is somewhat low, currently at 0.80, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.08, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 189.8% when compared to the same quarter one year prior, rising from $4.90 million to $14.20 million.
  • ENPRO INDUSTRIES INC 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 two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ENPRO INDUSTRIES INC turned its bottom line around by earning $2.98 versus -$7.18 in the prior year. For the next year, the market is expecting a contraction of 19.1% in earnings ($2.41 versus $2.98).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Machinery industry and the overall market, ENPRO INDUSTRIES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

EnPro Industries, Inc., together with its subsidiaries, engages in the design, development, manufacture, and marketing of engineered industrial products primarily in the United States and Europe. It operates in three segments: Sealing Products, Engineered Products, and Engine Products. The company has a P/E ratio of 18.8, equal to the average industrial industry P/E ratio and above the S&P 500 P/E ratio of 17.7. Enpro has a market cap of $687.7 million and is part of the

TheStreet Recommends

industrial goods

sector and

industrial

industry. Shares are down 13.9% year to date as of the close of trading on Friday.

You can view the full

Enpro Ratings Report

or get investment ideas from our

investment research center

.

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