NEW YORK ( TheStreet) -- Stifel Financial (NYSE: SF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, 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 net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Capital Markets industry. The net income increased by 126.4% when compared to the same quarter one year prior, rising from -$84.34 million to $22.30 million.
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels.
- Net operating cash flow has increased to -$52.25 million or 24.87% when compared to the same quarter last year. Despite an increase in cash flow of 24.87%, STIFEL FINANCIAL CORP is still growing at a significantly lower rate than the industry average of 108.26%.
- STIFEL FINANCIAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. 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, STIFEL FINANCIAL CORP swung to a loss, reporting -$0.15 versus $1.55 in the prior year. This year, the market expects an improvement in earnings ($1.79 versus -$0.15).
- Despite the weak revenue results, SF has significantly outperformed against the industry average of 38.0%. Since the same quarter one year prior, revenues slightly dropped by 1.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.