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) -- Deltic Timber Corporation (NYSE: DEL) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
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- The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 16.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 35.40% is the gross profit margin for DELTIC TIMBER CORP which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 8.80% is above that of the industry average.
- Net operating cash flow has significantly increased by 54.39% to $9.53 million when compared to the same quarter last year. In addition, DELTIC TIMBER CORP has also vastly surpassed the industry average cash flow growth rate of -0.67%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Paper & Forest Products industry. The net income increased by 346.9% when compared to the same quarter one year prior, rising from $0.72 million to $3.22 million.
- DEL's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Despite the fact that DEL's debt-to-equity ratio is low, the quick ratio, which is currently 0.59, displays a potential problem in covering short-term cash needs.
-- Written by a member of TheStreet Ratings Staff