NEW YORK ( TheStreet) -- Materion (NYSE: MTRN) has been downgraded by TheStreet Ratings from buy to hold. Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that we have evaluated. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and a generally disappointing performance in the stock itself. Highlights from the ratings report include:
- MTRN's debt-to-equity ratio is very low at 0.20 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.96 is somewhat weak and could be cause for future problems.
- MTRN, with its decline in revenue, underperformed when compared the industry average of 5.5%. Since the same quarter one year prior, revenues slightly dropped by 6.0%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- MATERION CORP has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, MATERION CORP reported lower earnings of $1.93 versus $2.26 in the prior year. This year, the market expects an improvement in earnings ($2.15 versus $1.93).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Metals & Mining industry. The net income has significantly decreased by 94.0% when compared to the same quarter one year ago, falling from $12.63 million to $0.76 million.
- 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. When compared to other companies in the Metals & Mining industry and the overall market, MATERION CORP's return on equity is below that of both the industry average and the S&P 500.
-- Written by a member of TheStreet Ratings Staff