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 solid stock price performance, growth in earnings per share, expanding profit margins and increase in net income. 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:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- U S BANCORP has improved earnings per share by 5.5% 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, U S BANCORP increased its bottom line by earning $3.01 versus $2.84 in the prior year. This year, the market expects an improvement in earnings ($3.20 versus $3.01).
- The gross profit margin for U S BANCORP is currently very high, coming in at 87.21%. 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 27.87% trails the industry average.
- USB, with its decline in revenue, slightly underperformed the industry average of 0.8%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Commercial Banks industry average. The net income increased by 2.5% when compared to the same quarter one year prior, going from $1,420.00 million to $1,456.00 million.
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 $74.4 billion and is part of the financial sector and banking industry. The company has a P/E ratio of 14.00, below the S&P 500 P/E ratio of 18.00. Shares are down 0.6% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.