NEW YORK ( TheStreet) -- Vulcan Materials Company (NYSE: VMC) has been upgraded by TheStreet Ratings from sell to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, poor profit margins and feeble growth in the company's earnings per share. Highlights from the ratings report include:
- The revenue growth significantly trails the industry average of 41.8%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has slightly increased to $114.71 million or 5.07% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.04%.
- VMC's debt-to-equity ratio of 0.73 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Despite the fact that VMC's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.60 is high and demonstrates strong liquidity.
- The gross profit margin for VULCAN MATERIALS CO is currently lower than what is desirable, coming in at 27.20%. It has decreased from the same quarter the previous year. Regardless of the weak results of the gross profit margin, the net profit margin of 2.60% is above that of the industry average.
- 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. Compared to other companies in the Construction Materials industry and the overall market on the basis of return on equity, VULCAN MATERIALS CO underperformed against that of the industry average and is significantly less than that of the S&P 500.