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 revenue growth, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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Highlights from the ratings report include:
- Despite its growing revenue, the company underperformed as compared with the industry average of 14.8%. Since the same quarter one year prior, revenues slightly increased by 5.8%. 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 slightly increased to $1,304.00 million or 5.58% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -9.59%.
- KROGER CO has improved earnings per share by 11.4% 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, KROGER CO reported lower earnings of $0.95 versus $1.75 in the prior year. This year, the market expects an improvement in earnings ($2.38 versus $0.95).
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Food & Staples Retailing industry average. The net income increased by 1.6% when compared to the same quarter one year prior, going from $432.00 million to $439.00 million.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Food & Staples Retailing industry and the overall market on the basis of return on equity, KROGER CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
The Kroger Co., together with its subsidiaries, operates as a retailer in the United States. The company also manufactures and processes food for sale in its supermarkets. The company has a P/E ratio of 20.1, below the average retail industry P/E ratio of 21 and above the S&P 500 P/E ratio of 17.7. Kroger has a market cap of $12.37 billion and is part of the
industry. Shares are down 10% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.