NEW YORK ( TheStreet) -- Citizens (NYSE: CIA) has been upgraded by TheStreet Ratings from hold to buy. 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, reasonable valuation levels, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:
  • 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 greatly underperformed compared to the Insurance industry average. The net income increased by 18.7% when compared to the same quarter one year prior, going from $7.63 million to $9.06 million.
  • CITIZENS INC has improved earnings per share by 20.0% in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. Despite the past stability of earnings, the consensus estimate anticipates a weakening in earnings. During the past fiscal year, CITIZENS INC's EPS of $0.30 remained unchanged from the prior years' EPS of $0.30. For the next year, the market is expecting a contraction of 40.0% in earnings ($0.18 versus $0.30).
  • CIA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • CIA's revenue growth trails the industry average of 19.8%. Since the same quarter one year prior, revenues slightly increased by 3.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.

Citizens, Inc. and its subsidiaries provide life and health insurance products and services in the United States and internationally. The company has a P/E ratio of 22.6, above the average insurance industry P/E ratio of 21.1 and above the S&P 500 P/E ratio of 16. Citizens has a market cap of $351.5 million and is part of the financial sector and insurance industry. Shares are down 4.3% year to date as of the close of trading on Tuesday.

You can view the full Citizens Ratings Report or get investment ideas from our investment research center.
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