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 revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and expanding profit margins. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
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Highlights from the ratings report include:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 41.75% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, TWC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- TIME WARNER CABLE INC has improved earnings per share by 15.3% 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, TIME WARNER CABLE INC increased its bottom line by earning $5.00 versus $3.64 in the prior year. This year, the market expects an improvement in earnings ($5.60 versus $5.00).
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.5%. Since the same quarter one year prior, revenues slightly increased by 9.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to the other companies in the Media industry and the overall market, TIME WARNER CABLE INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The gross profit margin for TIME WARNER CABLE INC is rather high; currently it is at 54.20%. 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 8.40% trails the industry average.
Time Warner Cable Inc., together with its subsidiaries, operates as a cable operator in the United States. It offers video, high-speed data, and voice services over its broadband cable systems to residential and business service customers. The company has a P/E ratio of 16.4, equal to the average media industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Time Warner Cable has a market cap of $27.37 billion and is part of the
industry. Shares are up 40.9% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.