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 (
-- State Street
) 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 solid stock price performance, impressive record of earnings per share growth, attractive valuation levels, expanding profit margins and notable return on equity. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
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Highlights from the ratings report include:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- STATE STREET CORP has improved earnings per share by 23.6% in the most recent quarter compared to the same quarter a year ago. 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, STATE STREET CORP increased its bottom line by earning $3.79 versus $3.08 in the prior year. This year, the market expects an improvement in earnings ($3.85 versus $3.79).
- The gross profit margin for STATE STREET CORP is currently very high, coming in at 95.50%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.30% significantly outperformed against the industry average.
- 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 Capital Markets industry and the overall market on the basis of return on equity, STATE STREET CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
State Street Corporation, a financial holding company, provides various financial products and services to institutional investors worldwide. State Street has a market cap of $21.21 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 12, below the S&P 500 P/E ratio of 17.7. Shares are up 9.8% 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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