NEW YORK ( TheStreet) -- Citizens (NYSE: CIA) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins.

Highlights from the ratings report include:
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • CIA's revenue growth trails the industry average of 20.8%. Since the same quarter one year prior, revenues slightly increased by 5.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CIA has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign.
  • Net operating cash flow has increased to $13.72 million or 20.05% when compared to the same quarter last year. Despite an increase in cash flow of 20.05%, CITIZENS INC is still growing at a significantly lower rate than the industry average of 82.69%.

Citizens, Inc., through its subsidiaries, provides life and health insurance policies in the United States and internationally. It primarily offers whole life insurance, endowments, credit insurance, final expense, and limited liability property policies. The company has a P/E ratio of 25.7, above the average insurance industry P/E ratio of 24.2 and above the S&P 500 P/E ratio of 17.7. Citizens has a market cap of $383.1 million and is part of the financial sector and insurance industry. Shares are up 8.1% year to date as of the close of trading on Friday.

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