NEW YORK ( TheStreet) -- Pengrowth Energy (NYSE: PGH) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, expanding profit margins, growth in earnings per share and good cash flow from operations. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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 Oil, Gas & Consumable Fuels industry. The net income increased by 1544.8% when compared to the same quarter one year prior, rising from -$6.13 million to $88.54 million.
  • PGH's revenue growth trails the industry average of 44.5%. Since the same quarter one year prior, revenues rose by 29.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The gross profit margin for PENGROWTH ENERGY CORP is currently very high, coming in at 72.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.50% significantly outperformed against the industry average.
  • PENGROWTH ENERGY CORP 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. During the past fiscal year, PENGROWTH ENERGY CORP increased its bottom line by earning $0.78 versus $0.31 in the prior year.
  • Net operating cash flow has remained constant at $161.57 million with no significant change when compared to the same quarter last year. Despite stable cash flow, PENGROWTH ENERGY CORP's cash flow growth rate is still lower than the industry average growth rate of 35.12%.

Pengrowth Energy Corporation engages in the acquisition, exploration, development, and production of oil and natural gas reserves in the Western Canadian Sedimentary Basin. The company has a P/E ratio of 20.5, below the average energy industry P/E ratio of 25.6 and above the S&P 500 P/E ratio of 17.7. Pengrowth Energy has a market cap of $3.6 billion and is part of the basic materials sector and energy industry. Shares are down 22.2% year to date as of the close of trading on Tuesday.

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