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 A- . The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. 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:
- The revenue growth came in higher than the industry average of 7.1%. Since the same quarter one year prior, revenues slightly increased by 7.7%. 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 $1,436.37 million or 12.89% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -15.36%.
- EOG RESOURCES INC's earnings per share declined by 34.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, EOG RESOURCES INC increased its bottom line by earning $4.08 versus $0.63 in the prior year. This year, the market expects an improvement in earnings ($5.44 versus $4.08).
- The gross profit margin for EOG RESOURCES INC is currently very high, coming in at 80.40%. Regardless of EOG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EOG's net profit margin of 12.40% compares favorably to the industry average.
- Despite currently having a low debt-to-equity ratio of 0.46, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.07 is sturdy.
EOG Resources, Inc., together with its subsidiaries, engages in the exploration, development, production, and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad and Tobago, the United Kingdom, and the People's Republic of China. EOG has a market cap of $31.17 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 26, above the S&P 500 P/E ratio of 17.7. Shares are up 16.8% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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