NEW YORK (
) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, generally poor debt management and a generally disappointing performance in the stock itself.
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Highlights from the ratings report include:
- IVR's very impressive revenue growth greatly exceeded the industry average of 18.0%. Since the same quarter one year prior, revenues leaped by 103.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, INVESCO MORTGAGE CAPITAL INC's return on equity exceeds that of both the industry average and the S&P 500.
- INVESCO MORTGAGE CAPITAL INC's earnings per share declined by 28.7% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last year. We anticipate that this should continue in the coming year. During the past fiscal year, INVESCO MORTGAGE CAPITAL INC reported lower earnings of $3.45 versus $3.69 in the prior year. For the next year, the market is expecting a contraction of 18.8% in earnings ($2.80 versus $3.45).
- The debt-to-equity ratio is very high at 6.12 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
Invesco Agency Securities Inc. operates as a mortgage real estate investment trust. The company was founded in 2008 and is based in Atlanta, Georgia. The company has a P/E ratio of 6.1, above the average real estate industry P/E ratio of 5.9 and below the S&P 500 P/E ratio of 17.7. Invesco has a market cap of $2.11 billion and is part of the
industry. Shares are up 30% year to date as of the close of trading on Tuesday.
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-- Written by a member of TheStreet Ratings Staff
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.