Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link
NEW YORK (
) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, 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 somewhat disappointing return on equity.
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Highlights from the ratings report include:
- SLG's revenue growth has slightly outpaced the industry average of 6.2%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 48.3% when compared to the same quarter one year prior, rising from $27.94 million to $41.43 million.
- SL GREEN REALTY CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SL GREEN REALTY CORP reported lower earnings of $0.93 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($1.40 versus $0.93).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- The gross profit margin for SL GREEN REALTY CORP is currently lower than what is desirable, coming in at 32.41%. Regardless of SLG's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, SLG's net profit margin of 10.89% is significantly lower than the industry average.
SL Green Realty Corp. is a real estate investment trust (REIT). The firm engages in the property management, acquisitions, financing, development, construction, and leasing. It also provides tenant services to its clients. The firm invests in real estate markets of the United States. The company has a P/E ratio of 184, above the S&P 500 P/E ratio of 17.7. SL Green has a market cap of $8.49 billion and is part of the financial sector and real estate industry. Shares are up 1.5% year to date as of the close of trading on Friday.
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