NEW YORK ( TheStreet) -- QEP Resources (NYSE: QEP) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and disappointing return on equity.

Highlights from the ratings report include:
  • QEP has underperformed the S&P 500 Index, declining 24.65% from its price level of one year ago. 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.
  • 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 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 1.3% in earnings ($1.58 versus $1.60).
  • 47.90% is the gross profit margin for QEP RESOURCES INC which we consider to be strong. Despite the high profit margin, it has decreased significantly from the same period last year. Despite the mixed results of the gross profit margin, QEP's net profit margin of 11.90% compares favorably to the industry average.
  • 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 32.53%.

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 15.9, below the average energy industry P/E ratio of 16.4 and below the S&P 500 P/E ratio of 17.7. QEP has a market cap of $5.44 billion and is part of the basic materials sector and energy industry. Shares are down 17.9% year to date as of the close of trading on Thursday.

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