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 compelling growth in net income, solid stock price performance, impressive record of earnings per share growth, 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 shows weak operating cash flow.
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Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 296.3% when compared to the same quarter one year prior, rising from $92.30 million to $365.80 million.
- Powered by its strong earnings growth of 225.71% and other important driving factors, this stock has surged by 59.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. 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.
- INGERSOLL-RAND PLC reported significant earnings per share improvement 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, INGERSOLL-RAND PLC reported lower earnings of $1.21 versus $2.24 in the prior year. This year, the market expects an improvement in earnings ($3.25 versus $1.21).
- The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.85 is somewhat weak and could be cause for future problems.
- IR, with its decline in revenue, underperformed when compared the industry average of 10.0%. Since the same quarter one year prior, revenues slightly dropped by 6.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
Ingersoll-Rand Public Limited Company engages in the design, manufacture, sale, and service of a diverse portfolio of industrial and commercial products in the United States and internationally. The company has a P/E ratio of 18.7, below the average industrial industry P/E ratio of 19 and above the S&P 500 P/E ratio of 17.7. Ingersoll-Rand has a market cap of $14.28 billion and is part of the
industry. Shares are up 52% 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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