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 impressive record of earnings per share growth, compelling growth in net income, expanding profit margins, good cash flow from operations and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.
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Highlights from the ratings report include:
- SUNTRUST BANKS INC reported significant earnings per share improvement 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, SUNTRUST BANKS INC turned its bottom line around by earning $0.93 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($2.00 versus $0.93).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 54.5% when compared to the same quarter one year prior, rising from $178.00 million to $275.00 million.
- The gross profit margin for SUNTRUST BANKS INC is currently very high, coming in at 78.70%. 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 11.30% trails the industry average.
- Net operating cash flow has increased to $1,690.00 million or 41.65% when compared to the same quarter last year. Despite an increase in cash flow, SUNTRUST BANKS INC's average is still marginally south of the industry average growth rate of 45.84%.
- Powered by its strong earnings growth of 51.51% and other important driving factors, this stock has surged by 37.62% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
SunTrust Banks, Inc. operates as the holding company for SunTrust Bank, which provides various financial services in the United States. The company has a P/E ratio of 16.6, below the average banking industry P/E ratio of 16.8 and below the S&P 500 P/E ratio of 17.7. SunTrust Banks has a market cap of $13.35 billion and is part of the
industry. Shares are up 41.8% 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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