NEW YORK ( TheStreet) -- Meredith Corporation (NYSE: MDP) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its notable return on equity, attractive valuation levels and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.

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 Media industry and the overall market, MEREDITH CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • Although MDP's debt-to-equity ratio of 0.25 is very low, it is currently higher than that of the industry average. Despite the fact that MDP's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
  • MDP has underperformed the S&P 500 Index, declining 22.93% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Media industry. The net income has decreased by 9.1% when compared to the same quarter one year ago, dropping from $33.37 million to $30.33 million.

Meredith Corporation, a media and marketing company, engages in magazine and book publishing, television broadcasting, integrated marketing, and interactive media business in the United States. It operates in two segments, Publishing and Broadcasting. The company has a P/E ratio of 8.6, below the average media industry P/E ratio of 8.7 and below the S&P 500 P/E ratio of 17.7. Meredith has a market cap of $885.7 million and is part of the services sector and media industry. Shares are down 31.8% year to date as of the close of trading on Monday.

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

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