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, expanding profit margins, good cash flow from operations, growth in earnings per share and revenue growth. 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.
- The gross profit margin for MEAD JOHNSON NUTRITION CO is rather high; currently it is at 64.30%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 16.62% is above that of the industry average.
- Net operating cash flow has significantly increased by 971.64% to $207.90 million when compared to the same quarter last year. In addition, MEAD JOHNSON NUTRITION CO has also vastly surpassed the industry average cash flow growth rate of 267.28%.
- MEAD JOHNSON NUTRITION CO has improved earnings per share by 6.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MEAD JOHNSON NUTRITION CO increased its bottom line by earning $2.96 versus $2.47 in the prior year. This year, the market expects an improvement in earnings ($3.26 versus $2.96).
- The revenue growth significantly trails the industry average of 35.4%. Since the same quarter one year prior, revenues slightly increased by 5.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
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 $17.4 billion and is part of the consumer goods sector and food & beverage industry. The company has a P/E ratio of 29.00, above the S&P 500 P/E ratio of 18.00. Shares are up 30.4% 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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