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 growth in earnings per share, revenue growth, solid stock price performance, expanding profit margins and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- GENERAL ELECTRIC CO has improved earnings per share by 43.5% 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. We feel that this trend should continue. During the past fiscal year, GENERAL ELECTRIC CO increased its bottom line by earning $1.24 versus $1.14 in the prior year. This year, the market expects an improvement in earnings ($1.51 versus $1.24).
- GE's revenue growth trails the industry average of 17.4%. Since the same quarter one year prior, revenues slightly increased by 2.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 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. Although other factors naturally played a role, the company's strong earnings growth was key. 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 GENERAL ELECTRIC CO is rather high; currently it is at 53.40%. Regardless of GE's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, GE's net profit margin of 9.81% compares favorably to the industry average.
General Electric Company operates as a technology and financial services company worldwide. General Electric has a market cap of $229.96 billion and is part of the industrial goods sector and industrial industry. The company has a P/E ratio of 16.4, below the S&P 500 P/E ratio of 17.7. Shares are up 22.4% year to date as of the close of trading on Tuesday.
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--Written by a member of TheStreet Ratings Staff.
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