Tejon Ranch Corporation Stock Upgraded (TRC)

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) -- Tejon Ranch Corporation (NYSE: TRC) 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, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, good cash flow from operations 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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Highlights from the ratings report include:
  • The revenue growth came in higher than the industry average of 3.5%. Since the same quarter one year prior, revenues slightly increased by 9.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TRC's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 9.11, which clearly demonstrates the ability to cover short-term cash needs.
  • 49.10% is the gross profit margin for TEJON RANCH CO which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 24.95% significantly outperformed against the industry average.
  • Net operating cash flow has significantly increased by 205.47% to $6.69 million when compared to the same quarter last year. In addition, TEJON RANCH CO has also vastly surpassed the industry average cash flow growth rate of -3.27%.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Management & Development industry. The net income increased by 57.2% when compared to the same quarter one year prior, rising from $2.56 million to $4.02 million.
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Tejon Ranch Co., together with its subsidiaries, engages in the real estate development and agribusiness activities in the United States. The company operates in three segments: Commercial/Industrial Real Estate Development and Services, Resort/Residential Real Estate Development, and Farming. The company has a P/E ratio of 63.5, above the S&P 500 P/E ratio of 17.7. Tejon Ranch has a market cap of $611.7 million and is part of the financial sector and real estate industry. Shares are up 8.5% year to date as of the close of trading on Wednesday.

You can view the full Tejon Ranch Ratings Report or get investment ideas from our investment research center.

-- Written by a member of TheStreet Ratings Staff

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.

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