NEW YORK ( TheStreet) -- NACCO Industries (NYSE: NC) has been upgraded by TheStreet Ratings from hold to buy. 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, robust revenue growth, notable return on equity and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins. Highlights from the ratings report include:
- NACCO INDUSTRIES reported significant earnings per share improvement 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. During the past fiscal year, NACCO INDUSTRIES increased its bottom line by earning $9.52 versus $1.01 in the prior year. This year, the market expects an improvement in earnings ($13.16 versus $9.52).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 90.4% when compared to the same quarter one year prior, rising from $13.50 million to $25.70 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 31.9%. Since the same quarter one year prior, revenues rose by 23.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Machinery industry and the overall market, NACCO INDUSTRIES's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.