NEW YORK ( TheStreet) -- Citizens (NYSE: CIA) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins. Highlights from the ratings report include:
- Compared to its closing price of one year ago, CIA's share price has jumped by 32.01%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- Despite its growing revenue, the company underperformed as compared with the industry average of 13.1%. Since the same quarter one year prior, revenues slightly increased by 4.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displaying stagnant earnings per share.
- Net operating cash flow has slightly increased to $15.21 million or 6.16% when compared to the same quarter last year. Despite an increase in cash flow, CITIZENS INC's cash flow growth rate is still lower than the industry average growth rate of 32.78%.
- 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 Insurance industry and the overall market on the basis of return on equity, CITIZENS INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
- The gross profit margin for CITIZENS INC is currently extremely low, coming in at 6.30%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 3.20% trails that of the industry average.
-- Written by a member of TheStreet Ratings Staff