NEW YORK (
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, unimpressive growth in net income and generally poor debt management.
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Highlights from the ratings report include:
- BTU's revenue growth has slightly outpaced the industry average of 11.9%. Since the same quarter one year prior, revenues rose by 16.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market on the basis of return on equity, PEABODY ENERGY CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The change in net income from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 2.1% when compared to the same quarter one year ago, dropping from $176.50 million to $172.70 million.
- The debt-to-equity ratio of 1.16 is relatively high when compared with the industry average, suggesting a need for better debt level management. Even though the debt-to-equity ratio is weak, BTU's quick ratio is somewhat strong at 1.04, demonstrating the ability to handle short-term liquidity needs.
Peabody Energy Corporation engages in the mining of coal. It mines, prepares, and sells thermal coal to electric utilities and metallurgical coal to industrial customers. The company has a P/E ratio of 6.6, equal to the average metals & mining industry P/E ratioand below the S&P 500 P/E ratio of 17.7. Peabody Energy has a market cap of $6.65 billion and is part of the
industry. Shares are down 31% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.
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.