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, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins.
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Highlights from the ratings report include:
- HFC's revenue growth has slightly outpaced the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 0.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- HFC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.50, which illustrates the ability to avoid short-term cash problems.
- 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 84.46% 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, HFC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- HOLLYFRONTIER CORP has improved earnings per share by 18.5% 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, HOLLYFRONTIER CORP increased its bottom line by earning $6.12 versus $0.97 in the prior year. This year, the market expects an improvement in earnings ($8.43 versus $6.12).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 14.8% when compared to the same quarter one year prior, going from $523.09 million to $600.37 million.
HollyFrontier Corporation operates as an independent petroleum refiner and marketer in the United States. It produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, liquefied petroleum gas, fuel oil, and specialty and modified asphalt. HollyFrontier has a market cap of $9.23 billion and is part of the basic materials sector and energy industry. The company has a P/E ratio of 6.3, below the S&P 500 P/E ratio of 17.7. Shares are up 94.1% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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