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 robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 1.9%. Since the same quarter one year prior, revenues rose by 16.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MON's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.50, which illustrates the ability to avoid short-term cash problems.
- MONSANTO CO has improved earnings per share by 35.9% 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 year. We feel that this trend should continue. During the past fiscal year, MONSANTO CO increased its bottom line by earning $2.96 versus $1.97 in the prior year. This year, the market expects an improvement in earnings ($3.70 versus $2.96).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 35.4% when compared to the same quarter one year prior, rising from $692.00 million to $937.00 million.
- The gross profit margin for MONSANTO CO is rather high; currently it is at 59.70%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 22.20% is above that of the industry average.
Monsanto Company, together with its subsidiaries, provides agricultural products for farmers in the United States and internationally. It operates in two segments, Seeds and Genomics, and Agricultural Productivity. The company has a P/E ratio of 22.8, above the average chemicals industry P/E ratio of 22.6 and above the S&P 500 P/E ratio of 17.7. Monsanto has a market cap of $48.53 billion and is part of the
industry. Shares are up 30% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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