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 solid stock price performance, revenue growth, good cash flow from operations, expanding profit margins 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:
- 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 37.62% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HNZ should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- The revenue growth significantly trails the industry average of 43.4%. Since the same quarter one year prior, revenues slightly increased by 2.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has increased to $385.64 million or 11.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.78%.
- 40.50% is the gross profit margin for HEINZ (H J) CO which we consider to be strong. 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 9.18% trails the industry average.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to other companies in the Food Products industry and the overall market on the basis of return on equity, HEINZ (H J) CO has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
H. J. Heinz Company, together with its subsidiaries, manufactures and markets food products for consumers, and foodservice and institutional customers in North America, Europe, the Asia Pacific, and internationally. HJ Heinz has a market cap of $23.25 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 22.5, above the S&P 500 P/E ratio of 17.7. Shares are up 25.7% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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