NEW YORK ( TheStreet) -- QEP Resources Inc (NYSE: QEP) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in net income and good cash flow from operations. However, as a counter to these strengths, we find that the company's return on equity has been disappointing.

Highlights from the ratings report include:
  • QEP's very impressive revenue growth exceeded the industry average of 35.4%. Since the same quarter one year prior, revenues leaped by 51.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Oil, Gas & Consumable Fuels industry average. The net income increased by 42.8% when compared to the same quarter one year prior, rising from $71.10 million to $101.50 million.
  • Net operating cash flow has slightly increased to $327.10 million or 9.06% when compared to the same quarter last year. Despite an increase in cash flow, QEP RESOURCES INC's cash flow growth rate is still lower than the industry average growth rate of 31.80%.
  • QEP RESOURCES INC has improved earnings per share by 42.5% 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 2.5% in earnings ($1.56 versus $1.60).
  • 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.

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 19.2, below the average energy industry P/E ratio of 19.8 and above the S&P 500 P/E ratio of 17.7. QEP has a market cap of $6.6 billion and is part of the basic materials sector and energy industry. Shares are up 2% year to date as of the close of trading on Monday.

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