NEW YORK ( TheStreet) -- Tanger Factory Outlet Centers (NYSE: SKT) 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, solid stock price performance, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had generally poor debt management on most measures that we evaluated.
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- SKT's revenue growth has slightly outpaced the industry average of 15.7%. Since the same quarter one year prior, revenues rose by 21.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- TANGER FACTORY OUTLET CTRS has improved earnings per share by 9.1% 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. During the past fiscal year, TANGER FACTORY OUTLET CTRS increased its bottom line by earning $0.51 versus $0.32 in the prior year. This year, the market expects an improvement in earnings ($0.54 versus $0.51).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Real Estate Investment Trusts (REITs) industry average. The net income increased by 24.4% when compared to the same quarter one year prior, going from $9.42 million to $11.72 million.
- The debt-to-equity ratio is very high at 2.20 and currently higher than the industry average, implying that there is very poor management of debt levels within the company.
-- Written by a member of TheStreet Ratings Staff