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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link

.

NEW YORK (

TheStreet

)

-- Landauer

(NYSE:

LDR

) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, good cash flow from operations, expanding profit margins and growth in earnings per share. 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:

  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Health Care Providers & Services industry. The net income increased by 1179.4% when compared to the same quarter one year prior, rising from $0.67 million to $8.56 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 6.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Net operating cash flow has increased to $6.42 million or 23.20% when compared to the same quarter last year. In addition, LANDAUER INC has also modestly surpassed the industry average cash flow growth rate of 15.67%.
  • The gross profit margin for LANDAUER INC is rather high; currently it is at 61.41%. Regardless of LDR's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, LDR's net profit margin of 21.47% significantly outperformed against the industry.
  • LANDAUER INC 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, LANDAUER INC reported lower earnings of $0.50 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($1.90 versus $0.50).

Landauer, Inc., together with its subsidiaries, provides technical and analytical services, outsourced medical physics services, and radiology related medical products Worldwide. The company operates in three segments: Radiation Measurement, Medical Physics, and Medical Products. The company has a P/E ratio of 12.7, below the S&P 500 P/E ratio of 17.7. Landauer has a market cap of $497 million and is part of the technology sector and electronics industry. Shares are down 0.9% year to date as of the close of trading on Thursday.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.