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 A-. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and attractive valuation levels. 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:
- Powered by its strong earnings growth of 31.57% and other important driving factors, this stock has surged by 25.74% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, STT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- STATE STREET CORP has improved earnings per share by 31.6% 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 $4.19 versus $3.79 in the prior year. This year, the market expects an improvement in earnings ($4.50 versus $4.19).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 23.4% when compared to the same quarter one year prior, going from $381.00 million to $470.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 3.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
State Street Corporation, a financial holding company, provides investment servicing and investment management services to institutional investors worldwide. State Street has a market cap of $25.9 billion and is part of the financial sector and financial services industry. The company has a P/E ratio of 13.00, below the S&P 500 P/E ratio of 18.00. Shares are up 21.8% year to date as of the close of trading on Monday.
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--Written by a member of TheStreet Ratings Staff.
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