NEW YORK ( TheStreet) -- Beneficial Mutual Bancorp (Nasdaq: BNCL) has been downgraded by TheStreet Ratings from buy to hold. 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 and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall. Highlights from the ratings report include:
- BENEFICIAL MUTUAL BANCORP 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 year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BENEFICIAL MUTUAL BANCORP turned its bottom line around by earning $0.15 versus -$0.11 in the prior year. This year, the market expects an improvement in earnings ($0.23 versus $0.15).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Thrifts & Mortgage Finance industry. The net income increased by 539.3% when compared to the same quarter one year prior, rising from -$0.90 million to $3.95 million.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, BENEFICIAL MUTUAL BANCORP has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- After a year of stock price fluctuations, the net result is that BNCL's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. We feel that the combination of its price rise over the last year and its current price-to-earnings ratio relative to its industry tend to reduce its upside potential.
- Net operating cash flow has significantly decreased to $14.25 million or 71.69% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
-- Written by a member of TheStreet Ratings Staff