NEW YORK ( TheStreet) -- Dime Community (Nasdaq: DCOM) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:
  • The gross profit margin for DIME COMMUNITY BANCSHARES is rather high; currently it is at 63.80%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.90% is above that of the industry average.
  • Net operating cash flow has significantly increased by 91.65% to $38.53 million when compared to the same quarter last year. In addition, DIME COMMUNITY BANCSHARES has also vastly surpassed the industry average cash flow growth rate of -114.06%.
  • DIME COMMUNITY BANCSHARES' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DIME COMMUNITY BANCSHARES increased its bottom line by earning $1.24 versus $0.79 in the prior year. This year, the market expects an improvement in earnings ($1.36 versus $1.24).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, DIME COMMUNITY BANCSHARES has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • Despite the weak revenue results, DCOM has outperformed against the industry average of 18.9%. Since the same quarter one year prior, revenues slightly dropped by 2.0%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.

Dime Community Bancshares, Inc. operates as the holding company for The Dime Savings Bank of Williamsburgh that provides financial services and loans primarily for multifamily housing. The company has a P/E ratio of nine, above the average banking industry P/E ratio of 8.5 and below the S&P 500 P/E ratio of 17.7. Dime Community has a market cap of $397.9 million and is part of the financial sector and banking industry. Shares are down 16% year to date as of the close of trading on Thursday.

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