NEW YORK ( TheStreet) -- Highwoods Properties Inc (NYSE: HIW) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, increase in stock price during the past year, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • HIGHWOODS PROPERTIES INC has improved earnings per share by 44.4% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, HIGHWOODS PROPERTIES INC increased its bottom line by earning $0.86 versus $0.57 in the prior year. For the next year, the market is expecting a contraction of 21.7% in earnings ($0.67 versus $0.86).
  • Net operating cash flow has increased to $47.88 million or 39.63% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 18.05%.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. 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.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 5.9%. Since the same quarter one year prior, revenues slightly increased by 4.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 1337.7% when compared to the same quarter one year prior, rising from -$0.86 million to $10.69 million.

Highwoods Properties, Inc. is a real estate investment trust. The trust engages in leasing, management, development, construction, and other customer-related services for its properties and for third parties. It invests in the real estate markets of United States. The company has a P/E ratio of 38.9, below the average real estate industry P/E ratio of 45.8 and above the S&P 500 P/E ratio of 15.8. Highwoods has a market cap of $2.4 billion and is part of the financial sector and real estate industry. Shares are up 6.3% year to date as of the close of trading on Monday.

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