NEW YORK ( TheStreet) -- Home Properties (NYSE: HME) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated. Highlights from the ratings report include:
- HOME PROPERTIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HOME PROPERTIES INC increased its bottom line by earning $0.88 versus $0.54 in the prior year. This year, the market expects an improvement in earnings ($1.28 versus $0.88).
- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Real Estate Investment Trusts (REITs) industry average. The net income increased by 113.0% when compared to the same quarter one year prior, rising from $7.22 million to $15.39 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 17.6%. Since the same quarter one year prior, revenues rose by 13.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, HOME PROPERTIES INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet RatingsStaff