NEW YORK ( TheStreet) -- Hartford Financial Services Group (NYSE: HIG) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- HIG's debt-to-equity ratio is very low at 0.29 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
- HARTFORD FINANCIAL SERVICES 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 suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, HARTFORD FINANCIAL SERVICES reported lower earnings of $1.10 versus $2.43 in the prior year. This year, the market expects an improvement in earnings ($3.35 versus $1.10).
- HIG, with its decline in revenue, slightly underperformed the industry average of 5.0%. Since the same quarter one year prior, revenues slightly dropped by 3.7%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The share price of HARTFORD FINANCIAL SERVICES has not done very well: it is down 14.87% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
-- Written by a member of TheStreet RatingsStaff