NEW YORK ( TheStreet) -- Unitrin (NYSE: UTR) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.

Highlights from the ratings report include:
  • UTR's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • UTR, with its decline in revenue, underperformed when compared the industry average of 20.7%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has significantly decreased to -$52.00 million or 312.24% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Insurance industry and the overall market, UNITRIN INC's return on equity is below that of both the industry average and the S&P 500.

Unitrin, Inc., a diversified insurance holding company, provides various insurance products and services in the United States. The company offers automobile, homeowners, life, health, and other insurance products for individuals and small businesses. The company has a P/E ratio of 10.2, equal to the average insurance industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Unitrin has a market cap of $1.5 billion and is part of the financial sector and insurance industry. Shares are down 4.6% year to date as of the close of trading on Tuesday.

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