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, notable return on equity, expanding profit margins, good cash flow from operations and solid stock price performance. 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:
- Despite its growing revenue, the company underperformed as compared with the industry average of 16.0%. Since the same quarter one year prior, revenues rose by 16.0%. 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.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SIMON PROPERTY GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- 47.30% is the gross profit margin for SIMON PROPERTY GROUP INC which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 20.20% trails the industry average.
- Net operating cash flow has slightly increased to $627.96 million or 4.46% when compared to the same quarter last year. Despite an increase in cash flow, SIMON PROPERTY GROUP INC's average is still marginally south of the industry average growth rate of 13.79%.
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
Simon Property Group, Inc. is an independent equity real estate investment trust. It engages in investment, ownership, and management of properties. The firm invests in the real estate markets across the globe. Simon Property Group has a market cap of $48.86 billion and is part of the financial sector and real estate industry. The company has a P/E ratio of 31.9, above the S&P 500 P/E ratio of 17.7. Shares are up 21.7% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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