NEW YORK ( TheStreet) -- Independent Bank (Nasdaq: INDB) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

Highlights from the ratings report include:
  • INDEPENDENT BANK CORP/MA has improved earnings per share by 36.8% 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, INDEPENDENT BANK CORP/MA increased its bottom line by earning $1.91 versus $0.89 in the prior year. This year, the market expects an improvement in earnings ($2.14 versus $1.91).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Commercial Banks industry average. The net income increased by 38.5% when compared to the same quarter one year prior, rising from $8.03 million to $11.12 million.
  • 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 Commercial Banks industry and the overall market on the basis of return on equity, INDEPENDENT BANK CORP/MA has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • After a year of stock price fluctuations, the net result is that INDB's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. 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.

Independent Bank Corp. operates as the bank holding company for Rockland Trust Company that provides commercial and retail banking, and wealth management services in Massachusetts. The company has a P/E ratio of 10.7, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Independent has a market cap of $485.1 million and is part of the financial sector and banking industry. Shares are down 15.7% year to date as of the close of trading on Thursday.

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