NEW YORK ( TheStreet) -- Oceanfirst Financial Corporation (Nasdaq: OCFC) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, expanding profit margins, increase in stock price during the past year and notable return on equity. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

Highlights from the ratings report include:
  • 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 Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, OCEANFIRST FINANCIAL CORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. 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.
  • The gross profit margin for OCEANFIRST FINANCIAL CORP is currently very high, coming in at 76.00%. It has increased from the same quarter the previous year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Thrifts & Mortgage Finance industry average, but is less than that of the S&P 500. The net income increased by 15.9% when compared to the same quarter one year prior, going from $4.40 million to $5.11 million.
  • OCEANFIRST FINANCIAL CORP has improved earnings per share by 16.7% 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, OCEANFIRST FINANCIAL CORP increased its bottom line by earning $1.12 versus $1.02 in the prior year. This year, the market expects an improvement in earnings ($1.15 versus $1.12).

OceanFirst Financial Corp. operates as the holding company for OceanFirst Bank that provides community banking services primarily in Ocean, Monmouth, and Middlesex counties in New Jersey. The company has a P/E ratio of 12, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 16.2. Oceanfirst Financial has a market cap of $263.2 million and is part of the financial sector and banking industry. Shares are up 8.9% year to date as of the previous trading day's close.

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