Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.
NEW YORK (
-- U.S. Bancorp
) 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 good cash flow from operations, growth in earnings per share, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.
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Highlights from the ratings report include:
- Net operating cash flow has significantly increased by 766.80% to $2,141.00 million when compared to the same quarter last year. In addition, U S BANCORP has also vastly surpassed the industry average cash flow growth rate of 74.34%.
- U S BANCORP's earnings per share improvement from the most recent quarter was slightly positive. 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, U S BANCORP increased its bottom line by earning $2.84 versus $2.45 in the prior year. This year, the market expects an improvement in earnings ($3.01 versus $2.84).
- The gross profit margin for U S BANCORP is currently very high, coming in at 86.50%. 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 27.98% trails the industry average.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
- USB, with its decline in revenue, slightly underperformed the industry average of 3.2%. Since the same quarter one year prior, revenues slightly dropped by 6.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
U.S. Bancorp, a financial services holding company, provides a range of financial services in the United States. Its services include lending and depository services, cash management, capital market, and trust and investment management services. U.S has a market cap of $70.8 billion and is part of the financial sector and banking 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 21.7% year to date as of the close of trading on Thursday.
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--Written by a member of TheStreet Ratings Staff.