NEW YORK ( TheStreet) -- SunTrust Banks (NYSE: STI) has been reiterated by TheStreet Ratings as a buy with a ratings score of B- . 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, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.
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- SUNTRUST BANKS 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, SUNTRUST BANKS INC turned its bottom line around by earning $0.93 versus -$0.17 in the prior year. This year, the market expects an improvement in earnings ($1.91 versus $0.93).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 38.9% when compared to the same quarter one year prior, rising from $180.00 million to $250.00 million.
- The gross profit margin for SUNTRUST BANKS INC is currently very high, coming in at 77.60%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, STI's net profit margin of 10.40% significantly trails the industry average.
- Despite the weak revenue results, STI has outperformed against the industry average of 26.1%. Since the same quarter one year prior, revenues slightly dropped by 1.1%. The declining revenue has not hurt the company's bottom line, with increasing 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 Commercial Banks industry and the overall market on the basis of return on equity, SUNTRUST BANKS 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 Ratings Staff.TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.