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 notable return on equity, good cash flow from operations and expanding profit margins. 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:
- Compared to other companies in the Food Products industry and the overall market, MEAD JOHNSON NUTRITION CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- Net operating cash flow has slightly increased to $172.90 million or 2.79% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.22%.
- MEAD JOHNSON NUTRITION CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. 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, MEAD JOHNSON NUTRITION CO increased its bottom line by earning $2.47 versus $2.20 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $2.47).
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 10.9%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for MEAD JOHNSON NUTRITION CO is rather high; currently it is at 63.30%. Regardless of MJN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, MJN's net profit margin of 15.20% compares favorably to the industry average.
Mead Johnson Nutrition Company manufactures, distributes, and sells infant formulas, children's nutrition, and other nutritional products. Mead Johnson Nutrition has a market cap of $13.65 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 24.9, above the S&P 500 P/E ratio of 17.7. Shares are down 2.2% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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