NEW YORK (TheStreet) -- StanCorp Financial Group, Inc. (SFG) was upgraded to "neutral" from "underperform" at Sterne Agee on Friday as the company feels the risk/reward view on the company is more balanced.
"To be sure, the outlook for sales and revenues in group insurance remains pressured, but we suspect first quarter results may represent a trough," the firm said.
The holding company began trading Friday morning down -0.32 to $59.83.
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TheStreet Ratings team rates STANCORP FINANCIAL GROUP INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate STANCORP FINANCIAL GROUP INC (SFG) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 0.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Although SFG's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average.
- Powered by its strong earnings growth of 67.81% and other important driving factors, this stock has surged by 49.77% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, SFG should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- STANCORP FINANCIAL GROUP 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, STANCORP FINANCIAL GROUP INC increased its bottom line by earning $5.13 versus $3.12 in the prior year. This year, the market expects an improvement in earnings ($5.20 versus $5.13).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, STANCORP FINANCIAL GROUP INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- You can view the full analysis from the report here: SFG Ratings Report