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) -- WellPoint (NYSE: WLP) 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 growth in earnings per share, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels and increase in net income. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- WELLPOINT INC has improved earnings per share by 13.2% 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, WELLPOINT INC increased its bottom line by earning $7.19 versus $6.91 in the prior year. This year, the market expects an improvement in earnings ($7.45 versus $7.19).
- The current debt-to-equity ratio, 0.57, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, WLP has a quick ratio of 1.97, which demonstrates the ability of the company to cover short-term liquidity needs.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Health Care Providers & Services industry average. The net income increased by 1.2% when compared to the same quarter one year prior, going from $683.20 million to $691.20 million.
- WLP, with its decline in revenue, underperformed when compared the industry average of 14.3%. Since the same quarter one year prior, revenues slightly dropped by 0.3%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
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