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) -- Astoria Financial Corporation (NYSE: AF) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its increase in net income, attractive valuation levels, expanding profit margins, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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- The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Thrifts & Mortgage Finance industry average. The net income increased by 43.8% when compared to the same quarter one year prior, rising from $11.76 million to $16.92 million.
- The gross profit margin for ASTORIA FINANCIAL CORP is rather high; currently it is at 60.10%. 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 10.36% trails the industry average.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
- ASTORIA FINANCIAL CORP has improved earnings per share by 41.7% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, ASTORIA FINANCIAL CORP reported lower earnings of $0.55 versus $0.71 in the prior year. This year, the market expects an improvement in earnings ($0.60 versus $0.55).
-- Written by a member of TheStreet Ratings Staff