NEW YORK ( TheStreet) -- Vectren (NYSE: VVC) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and generally poor debt management. Highlights from the ratings report include:
- The revenue growth came in higher than the industry average of 3.2%. Since the same quarter one year prior, revenues rose by 18.2%. 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 S&P 500 and the Multi-Utilities industry. The net income increased by 73.6% when compared to the same quarter one year prior, rising from $8.70 million to $15.10 million.
- Net operating cash flow has increased to $81.20 million or 45.00% when compared to the same quarter last year. Despite an increase in cash flow of 45.00%, VECTREN CORP is still growing at a significantly lower rate than the industry average of 96.37%.
- 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 Multi-Utilities industry and the overall market, VECTREN CORP's return on equity is below that of both the industry average and the S&P 500.
- The gross profit margin for VECTREN CORP is currently lower than what is desirable, coming in at 25.80%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.20% significantly trails the industry average.