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, good cash flow from operations, expanding profit margins and solid stock price performance. 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:
- 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 ($3.58 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.
- Net operating cash flow has increased to $1,690.00 million or 41.65% when compared to the same quarter last year. In addition, SUNTRUST BANKS INC has also vastly surpassed the industry average cash flow growth rate of -70.34%.
- 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.
- Powered by its strong earnings growth of 51.51% and other important driving factors, this stock has surged by 49.58% 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. SunTrust Banks has a market cap of $15.61 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 19.5, above the S&P 500 P/E ratio of 17.7. Shares are up 61.8% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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