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 A- . The company's strengths can be seen in multiple areas, such as its increase in net income, notable return on equity, expanding profit margins, growth in earnings per share and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Chemicals industry average. The net income increased by 0.2% when compared to the same quarter one year prior, going from $429.00 million to $430.00 million.
- 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. When compared to other companies in the Chemicals industry and the overall market, PRAXAIR INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- 42.50% is the gross profit margin for PRAXAIR INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.50% is above that of the industry average.
- PRAXAIR INC's earnings per share improvement from the most recent quarter was slightly positive. 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, PRAXAIR INC increased its bottom line by earning $5.45 versus $3.84 in the prior year. This year, the market expects an improvement in earnings ($5.57 versus $5.45).
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
Praxair, Inc. engages in the production, distribution, and sale atmospheric and process gases, as well as surface coatings in North America, Europe, South America, and Asia. Praxair has a market cap of $32.91 billion and is part of the basic materials sector and chemicals industry. The company has a P/E ratio of 19.9, above the S&P 500 P/E ratio of 17.7. Shares are up 1.2% 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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