Editor's Note: 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. NEW YORK ( TheStreet) -- Encana (NYSE: ECA) has been reiterated by TheStreet Ratings as a hold with a ratings score of C- . The company's strongest point has been its a solid financial position based on a variety of debt and liquidity measures that we have looked at. At the same time, however, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
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- ECA, with its very weak revenue results, has greatly underperformed against the industry average of 2.7%. Since the same quarter one year prior, revenues plummeted by 63.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The debt-to-equity ratio of 1.12 is relatively high when compared with the industry average, suggesting a need for better debt level management. Regardless of the company's weak debt-to-equity ratio, ECA has managed to keep a strong quick ratio of 1.72, which demonstrates the ability to cover short-term cash needs.
- The gross profit margin for ENCANA CORP is rather low; currently it is at 21.80%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -202.70% is significantly below that of the industry average.
- Net operating cash flow has decreased to $631.00 million or 34.47% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
--Written by a member of TheStreet Ratings Staff.FREE from Real Money's Jim Cramer: Winners and Losers Election 2012 - Steps to take NOW so you can profit no matter who is in charge! Free Download Now