NEW YORK ( TheStreet) -- Citizens (NYSE: CIA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The gross profit margin for CITIZENS INC is currently extremely low, coming in at 6.00%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.90% trails that of the industry average.
- In its most recent trading session, CIA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- 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, CITIZENS INC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 3.3%. 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 Insurance industry average, but is less than that of the S&P 500. The net income increased by 10.9% when compared to the same quarter one year prior, going from $1.61 million to $1.78 million.