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 revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- POT's revenue growth has slightly outpaced the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 3.0%. 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 current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.00, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for POTASH CORP SASK INC is rather high; currently it is at 53.60%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 21.80% is above that of the industry average.
- Net operating cash flow has increased to $1,222.00 million or 14.84% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.84%.
- POTASH CORP SASK INC's earnings per share declined by 37.5% in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, POTASH CORP SASK INC increased its bottom line by earning $3.52 versus $1.98 in the prior year.
Potash Corporation of Saskatchewan Inc., together with its subsidiaries, produces and sells fertilizers and related industrial and feed products primarily in the United States and Canada. The company mines and produces potash, which is used as fertilizer. The company has a P/E ratio of 14.8, below the average chemicals industry P/E ratio of 15 and below the S&P 500 P/E ratio of 17.7. Potash Corporation of Saskatchewan has a market cap of $37.03 billion and is part of the
industry. Shares are up 3% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.