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) -- Sterling Bancorp (NYSE: STL) has been upgraded by TheStreet Ratings from hold to buy. 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, revenue growth, 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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- STERLING BANCORP/NY has improved earnings per share by 21.4% 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, STERLING BANCORP/NY increased its bottom line by earning $0.51 versus $0.20 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.51).
- 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 22.2% when compared to the same quarter one year prior, going from $4.37 million to $5.34 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.2%. Since the same quarter one year prior, revenues slightly increased by 1.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The gross profit margin for STERLING BANCORP/NY is currently very high, coming in at 87.30%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.42% trails the industry average.
- 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, STERLING BANCORP/NY has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff