NEW YORK ( TheStreet) -- QEP Resources Inc (NYSE: QEP) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, disappointing return on equity and generally weak debt management.

Highlights from the ratings report include:
  • QEP has underperformed the S&P 500 Index, declining 6.70% from its price level of one year ago. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
  • 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. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, QEP RESOURCES INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.
  • Despite currently having a low debt-to-equity ratio of 0.51, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that QEP's debt-to-equity ratio is mixed in its results, the company's quick ratio of 0.58 is low and demonstrates weak liquidity.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 2.2% when compared to the same quarter one year prior, going from $90.80 million to $92.80 million.
  • QEP RESOURCES INC has improved earnings per share by 33.3% 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. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, QEP RESOURCES INC increased its bottom line by earning $1.60 versus $1.21 in the prior year. For the next year, the market is expecting a contraction of 3.1% in earnings ($1.55 versus $1.60).

QEP Resources, Inc., through its subsidiaries, operates as an independent oil and natural gas exploration and production company. The company has a P/E ratio of 16.3, equal to the average energy industry P/E ratio and below the S&P 500 P/E ratio of 17.7. QEP has a market cap of $4.9 billion and is part of the basic materials sector and energy industry. Shares are down 23.2% year to date as of the close of trading on Friday.

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