Rating Change #3

Brookfield Office Properties Inc ( BPO) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, good cash flow from operations and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 9.4%. Since the same quarter one year prior, revenues rose by 43.8%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 285.88% to $158.00 million when compared to the same quarter last year. In addition, BROOKFIELD OFFICE PPTYS INC has also vastly surpassed the industry average cash flow growth rate of 15.61%.
  • The gross profit margin for BROOKFIELD OFFICE PPTYS INC is rather high; currently it is at 56.90%. Regardless of BPO's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BPO's net profit margin of 64.80% significantly outperformed against the industry.
  • BROOKFIELD OFFICE PPTYS INC 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. This company has not demonstrated a clear trend in earnings over the past two years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, BROOKFIELD OFFICE PPTYS INC increased its bottom line by earning $2.86 versus $2.53 in the prior year.
  • BPO's debt-to-equity ratio of 0.97 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. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.41 is very low and demonstrates very weak liquidity.
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Brookfield Properties Corporation is a publicly owned real estate investment firm. The firm engages in the ownership, development, and management of premier commercial properties. It also provides ancillary real estate service businesses, such as tenant service and amenities. The company has a P/E ratio of 5.8, above the average real estate industry P/E ratio of 4.3 and below the S&P 500 P/E ratio of 17.7. Brookfield Office has a market cap of $8.77 billion and is part of the financial sector and real estate industry. Shares are up 9% year to date as of the close of trading on Tuesday.

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

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