NEW YORK ( TheStreet) -- ESB Financial Corporation (Nasdaq: ESBF) 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, growth in earnings per share, increase in net income, expanding profit margins and good cash flow from operations. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

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.
  • ESB FINANCIAL CORP has improved earnings per share by 11.7% 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. During the past fiscal year, ESB FINANCIAL CORP increased its bottom line by earning $0.98 versus $0.83 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the Thrifts & Mortgage Finance industry average, but is less than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from $3.46 million to $3.96 million.
  • The gross profit margin for ESB FINANCIAL CORP is rather high; currently it is at 57.10%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 18.90% is above that of the industry average.
  • Net operating cash flow has increased to $5.35 million or 14.26% when compared to the same quarter last year. In addition, ESB FINANCIAL CORP has also vastly surpassed the industry average cash flow growth rate of -105.62%.

ESB Financial Corporation operates as a thrift holding company for ESB Bank that provides retail and commercial financial products and services in Western Pennsylvania. The company has a P/E ratio of 12.6, equal to the average banking industry P/E ratio and below the S&P 500 P/E ratio of 17.7. ESB Financial has a market cap of $197.3 million and is part of the financial sector and banking industry. Shares are down 17.1% year to date as of the close of trading on Monday.

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