NEW YORK ( TheStreet) -- BT Group (NYSE: BT) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.

Highlights from the ratings report include:
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Diversified Telecommunication Services industry. The net income increased by 72.3% when compared to the same quarter one year prior, rising from $296.62 million to $510.95 million.
  • BT GROUP PLC 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 year. We feel that this trend should continue. During the past fiscal year, BT GROUP PLC turned its bottom line around by earning $1.96 versus -$0.37 in the prior year. This year, the market expects an improvement in earnings ($2.23 versus $1.96).
  • Powered by its strong earnings growth of 64.86% and other important driving factors, this stock has surged by 101.54% 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, BT should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Net operating cash flow has increased to $1,337.45 million or 24.45% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 0.22%.
  • Compared to other companies in the Diversified Telecommunication Services industry and the overall market, BT GROUP PLC's return on equity significantly exceeds that of both the industry average and the S&P 500.

BT Group plc provides communications solutions and services worldwide. It engages in the provision of networked IT services; and local, national, and international telecommunications services for use at home, at work, and on the move. The company has a P/E ratio of 10.3, below the average telecommunications industry P/E ratio of 16.3 and below the S&P 500 P/E ratio of 16.2. BT Group has a market cap of $26 billion and is part of the technology sector and telecommunications industry. Shares are up 14.3% year to date as of the previous trading day's close.

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