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-- Fresenius Medical Care Corporation



) 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, expanding profit margins, growth in earnings per share, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • FMS's debt-to-equity ratio of 0.83 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.02 is sturdy.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 48.20% over the past year, a rise that has exceeded that of the S&P 500 Index. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
  • FRESENIUS MEDICAL CARE AG&CO's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FRESENIUS MEDICAL CARE AG&CO increased its bottom line by earning $3.24 versus $2.98 in the prior year. This year, the market expects an improvement in earnings ($3.60 versus $3.24).
  • 38.60% is the gross profit margin for FRESENIUS MEDICAL CARE AG&CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 7.30% is above that of the industry average.
  • FMS's revenue growth has slightly outpaced the industry average of 3.9%. Since the same quarter one year prior, revenues slightly increased by 5.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Fresenius Medical Care AG & Co. KGaA, a kidney dialysis company, offers dialysis treatment services through its clinics. As of December 31, 2009, the company provided dialysis treatment to 195,651 patients in 2,553 clinics worldwide located in approximately 35 countries. The company has a P/E ratio of 21.5, above the average health services industry P/E ratio of 21.3 and above the S&P 500 P/E ratio of 17.7. Fresenius Medical Care has a market cap of $20.7 billion and is part of the

health care

sector and

health services

industry. Shares are up 22.3% year to date as of the close of trading on Wednesday.

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