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 revenue growth, notable return on equity, solid stock price performance, good cash flow from operations and expanding profit margins. 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 16.4%. Since the same quarter one year prior, revenues rose by 15.2%. 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 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.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of 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.
- Net operating cash flow has increased to $685.93 million or 35.35% 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 38.58%.
- 46.50% is the gross profit margin for SIMON PROPERTY GROUP INC which we consider to be strong. Regardless of SPG's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 22.81% trails the industry average.
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 $54.8 billion and is part of the financial sector and real estate industry. The company has a P/E ratio of 37.00, above the S&P 500 P/E ratio of 18.00. Shares are up 11.3% 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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